Peter why would the above stop the fed from providing more QE??
Its not the main factor, but one that has been mentioned recently as a possible psychological influence on US consumers/employers. Personally I can't see how QE3 would fix Europe, possibly harm it by making the currency relatively expensive. Still any progress made ought to reduce it as a factor for consideration - if it ever was.
Have you seen the dismal housing, CPI, low inflation, Employment figures ETC???
Housing is on the whole looking positive. Core CPI is exactly where they want it, headline CPI is even better - falling "gas" prices are putting more money in people's pockets without being deflationary. Employment growth is slow, but you can't panic over one month's data. Weather and the Europe psychological factor have both been mentioned as possible causes for this.
Corporate profits are at record highs, equity markets are near their highs, bond yields are low, liquidity is plentiful. There's not much justification for more easing among that lot. There is clearly money sloshing around, its just not trickling down to average consumers yet.
Do you really think that if you placed yourself in the Feds position that you would have the guts to say "Hey the European countries just received a bailout which may or may not work so let’s just forget about us providing more QE and let’s hope that the figures improve over the coming few months"????
As I said, I don't see how they can fix Europe's problems with more QE. Europe's problems are to do with the structure of the EMU. If there's a crash, of course Fed will assist with any liquidity needs, but that's different to QE.
Anyway these seem to be positive developments (and non-inflationary). I'm not sure how they will affect currencies, whether gold will follow EUR or do its own thing. FOMC a much more important event for POG imo.
