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Market Outlook: Why Fed Is Likely to Remain on Hold
CNBC.com | March 11, 2012 | 04:42 PM EDT

The Federal Reserve meets in the coming week against the backdrop of an improving employment picture , making further monetary easing less likely for now.

The February employment report Friday showed a better-than-expected 227,000 nonfarm payrolls were created, and revisions showed another 60,000 workers were added in December and January.

“It’s enough to sustain the economic momentum and keep the Fed on the sidelines … I think the market is now waiting for the next thing,” said Jeffrey Kleintop, chief market strategist at LPL Financial.

The Fed will probably keep the door open to more easing, but it is not expected to advance the idea. Fed Chairman Ben Bernanke, in Congressional testimony earlier this month, suggested the Fed does not, for now, have to do a third round of quantitative easing, or purchase securities in an effort to drive down interest rates. The Fed had put that option on the table, and before Bernanke spoke, some market participants had expected the Fed to act sooner rather than later.

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