Does The Bernank Have Another Trick Up His Sleeve?
All eyes will be on the Federal Reserve Bank Chairman Ben Bernanke this afternoon as the central bank holds their FOMC meeting. The Bernank now holds a press conference where he will take questions from reporters. Every investor is now waiting to see if the Fed boss will talk about a possible QE-3 to help stimulate the economy. The last $600 billion quantitative easing program just ended on June 30, 2011. Normally, the Federal Reserve will wait several months before hinting at doing another U.S. Treasury purchasing program.
The central bank is expected to keep the Fed funds rate at zero to a quarter percent. This is the overnight lending rate to the large banks such as J.P. Morgan Chase & Co.(NYSE:JPM), Citigroup Inc.(NYSE:C), Wells Fargo & Co.(NYSE:WFC), and Bank of America Corp.(NYSE:BAC). Considering the current economic climate, the Federal Reserve is not likely to make a statement that would rattle the markets more than they have already been lately.
The major stock indexes are rebounding today ahead of the Federal Reserve announcement. Traders can watch for intra-day resistance on the SPDR Dow Jones Industrial Average(NYSE:DIA) around the $111.00 and $111.50 levels.