Even after one day markets don’t seem keen for Fed Plan
Monday, April 13th, 2009The economic markets were not so keen how it will work out even after 24 hours of the ramping of the plans by Federal Reserve to refresh the economy through injecting over one trillion dollars. The investors still are not confident enough from both the Fed and governmental plans that it could really help in resuming the lending to the consumers. They are still concerned that it is not easy for Fed to remove them from being involved in the market.
On Wednesday with this news the stock markets witnessed an increase along with Dow Jones Industrial Average came down by thirty-four points led by the turn down in the shares of the banks. Lately the Dollar also came down as compared to the other currencies, it came down a ten week low to the euro and a one month low against the yen. It is said that the commodity markets which include oil and gold are in a comfortable position.
There is no doubt that the investors seems little worried about the price rise. The Fed plans comprises of purchasing long-term treasury worth three hundred billon dollars along with doubling their buying of the mortgage-related debt. This would add $1.14 trillion to the extra liquidity in to the whole system. Mr. Michael who is a main economist with Action Economics in Boulder, Colo was of the view that the aggressive move made by Fed came as a complete surprise for the markets. Now the Fed is planning to hold the treasury yields.
Bank of America, Citigroup, and J.P. Morgan Chase they all are off over three percent. Morgan Stanley came down eight percent and Goldman Sachs came down two percent. But the Wall Street’s investors stayed positive that the Fed’s hard work will help reducing the credit calamity. Dow Jones-AIG Commodity Index jumped 5.1 percent and the crude raised fifty dollars a barrel. It all happened due to the major fall of the dollar value which will witness the increase in its supply by the moves made by Fed. In the international markets the oil is priced in the dollars and some of the main oil producing countries officials have also made a comment that the oil prices will naturally rise with the weaker dollar.
With the trading which was noticed on Wednesday after hours the prices of gold have increased a little. On Thursday afternoon some of the Latin American currencies like Mexican peso have came down sharply.