Markets Pointing Toward Rally In Risk

Fri, 07/13/2012 - 08:28 EDT - Seeking Alpha

By Chris Ciovacco: John Williams, President of the Federal Reserve Bank of San Francisco, delivered a risk-friendly speech in Portland, Oregon on Thursday. From the Wall Street Journal:

"This is a period when extraordinary vigilance is demanded," Mr. Williams said. "We stand ready to do what is necessary to attain our goals of maximum employment and price stability," the central banker said. Should the Fed need to do more, "the most effective tool would be additional purchases of longer-maturity securities, including agency mortgage-backed securities."

The recent weakness in the markets is concerning, but not overly so. A Fed meeting is a little more than two weeks away. The odds are extremely low the Fed does not deliver at least some encouraging language in their July/August statement. They do not need to announce QE3, they just need to hint at it. QE2 was hinted at in late August 2010, but not announced until earlyComplete Story »

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