Ed’s Daily Notes for July 10th   Leave a comment

Bloomberg: Are Investors Complacent About Risk? Concern Raised in June Fed Meeting

I couldn’t help but chuckle at the hypocrisy in this:

Some Federal Reserve policy makers were concerned investors may be growing too complacent about the economic outlook and the central bank should be on the lookout for excessive risk-taking, minutes of their June meeting show.

“Signs of increased risk-taking were viewed by some participants as an indication that market participants were not factoring in sufficient uncertainty about the path of the economy and monetary policy,” the minutes showed.

Fed officials expressed concern about low volatility in equity, currency and fixed-income markets. At the same time, “it was noted that monetary policy needed to continue to promote the favorable financial conditions required to support the economic expansion,” according to the minutes of the June 17-18 Federal Open Market Committee meeting released today in Washington.

Let’s get this straight: Investors have taken on increased risks, yet continued easy monetary policy from the Fed doesn’t increase risk for the economy?

Another thing to note:

[Fed] Officials also agreed that their bond-purchase program would end with a final reduction of $15 billion in buying at their October meeting if the economy progresses as they expect.

Posted July 10, 2014 by edmcgon in Economy, Federal Reserve, News

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