September 2012 Macro Pulse -- Rewarding the Market’s Tantrum

Like to a child throwing a tantrum, the financial markets collectively have been insisting the Federal Reserve provide another round of accommodative monetary policy. The Fed, playing the part of the weak-willed parent, finally gave in to the incessant demands by promising on September 13 to not only keep the federal funds rate essentially at zero percent into 2015, but also to purchase $40 billion of mortgage-backed securities per month for an unspecified length of time; should those measures fail to stimulate employment, the Fed will also consider purchasing other assets. Now, we will be the first to admit the U.S. economy is showing increasing signs of weakness. For example:

Click here to read the entire September 2012 Macro Pulse recap.

The Macro Pulse blog is a commentary about recent economic developments affecting the forest products industry. That commentary provides context for our 24-month forecast, which is contained in the monthly Economic Outlook newsletter available through Forest2Market. The monthly Macro Pulse newsletter summarizes the previous 30 days of commentary available on this website.