CIO Vantage Point
August 02, 2012 Posted by:
Joe Morgan, CFA
The views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates.
The Federal Reserve's Open Market Committee met this week and - after high expectations of additional stimulus - did exactly nothing. The accompanying statement only updated the language, making it clear a meeting actually occurred but providing no real insight into action that may follow.
The problem is the Fed hasn't much ammunition left and wishes to reserve its final bullets with hopes no one notices their ineffectiveness.
By talking at the markets, implying grand promises of support to come should the need arise, they have painted themselves into a small and uncomfortable corner. They want to be needed in order to maintain power, but with nothing to do that causes a real effect on the economy, acting would only confirm their impotence.
Only Congressional agreement can clear the fog of uncertainty that both businesses and consumers face today allowing for capital investment to ramp up, and getting the economic machine to function once again.
The views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or SVB Asset Management, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
SVB Asset Management, a registered investment advisor, is a non-bank affiliate of Silicon Valley Bank and member of SVB Financial Group. Products offered by SVB Asset Management are not FDIC insured, are not deposits or other obligations of Silicon Valley Bank, and may lose value.
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Much Ado...August 02, 2012 Posted by: Joe Morgan, CFAThe views expressed in this column are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates.
The Federal Reserve's Open Market Committee met this week and - after high expectations of additional stimulus - did exactly nothing. The accompanying statement only updated the language, making it clear a meeting actually occurred but providing no real insight into action that may follow.
The problem is the Fed hasn't much ammunition left and wishes to reserve its final bullets with hopes no one notices their ineffectiveness.
By talking at the markets, implying grand promises of support to come should the need arise, they have painted themselves into a small and uncomfortable corner. They want to be needed in order to maintain power, but with nothing to do that causes a real effect on the economy, acting would only confirm their impotence.
Only Congressional agreement can clear the fog of uncertainty that both businesses and consumers face today allowing for capital investment to ramp up, and getting the economic machine to function once again.
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