Recently, we sent to our clients a letter with our views about “crossroads” that this summer can bring markets. If you remember, one concern we had was that the Fed might begin talk of another round of Quantitative Easing if job creation floundered this summer. If this were to occur, then Gross Domestic Product (GDP) would be in a revised 1-2% range and talk of a double dip in markets might take place.
Last Friday in the first live press conference for the Fed, Chairman Bernanke all but put a possible QE3 to rest. So any change from the announced plan to stop purchasing in June is unlikely. As always, we still have issues we will monitor, but the QE3 threat seems to be one less for us to consider. All in all, it was good news for the short-term.