Forex Investment and Currency Trading

The FED did not disappoint with a huge surprise to the market where it is now targeting a range of 0-25% for FED funds.  On top of the incredible rate cut, the FED also explicitly commits to quantitative easing with its discussion of buying long dated government debt and leaving rates low for the foreseeable future. 
The FED has pushed rates to levels where its about the quantity of money available more than the rate.  So the term quantitative easing drives the result even as the FED refused to use that term relying instead on flexibility and a set of explicit [...]

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Present FOMC Statement for December 16-17

Since the Committee’s last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further. Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters. The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth [...]

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Much has happened since the FOMC last met in late October; the economic data have deteriorated in a noticeable way, the effective fed funds rate has traded persistently below the target rate, and the Fed has continued to roll out new facilities financed in part by the creation of excess reserves - effectively “printing money.” In late November, the Fed announced that it was extending the meeting to two days “to allow time for additional discussion.” One believes that some of this discussion will revolve around whether and how to formalize the shift in the emphasis of monetary policy from achieving [...]

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The Treasury reported that the federal budget deficit grew to $164.4bn in November, in line with expectations. Outlays rose to $309bn, an increase of 24% y/y, as the government allocated additional funds to the economic recovery programs. The Treasury purchased $23.2bn in agency mortgage-backed securities (MBS) in November, up from $21.5bn in October. Total commerce and housing related outlays summed to $95bn. Receipts fell by 4.2% y/y to $145bn in November as weaker economic growth led to a decline in corporate tax receipts and personal income taxes. On a 12-month basis, the deficit increased to $701bn from $635bn, consistent with [...]

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