Concerns about global economic slowdown lingered and showed signs of intensifying last week. At the August FOMC meeting, the Fed downgraded the US economic outlook as ‘the pace of recovery in output and employment has slowed in recent month’ and ‘the pace of economic recovery is likely to be more modest in the near term than had been anticipated’. Apart from leaving the Fed funds rate at 0-0.25%, policymakers, in order to support the economic recovery in a context of price stability, decided to keep constant the Fed’s holdings of securities at their current level (at 2.05 trillion) by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities (2-year to 10-year bonds).
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Weekly Fundamentals – Oil Down Despite Upgrades. Sovereign Risk Woes Loom as Peripheral EZ Disappoint
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