Too big or not too big?
When the Fed failed to meet market’s expectations for further easing in August, it only took a few hours for investors to convince themselves that “no easing now” only means more easing tomorrow. With all eyes on the inevitable moment that something will finally come out, leaks suggest that it could be time for a piecemeal, open-ended QE program, combining both mortgage and Treasury purchases. No matter what the case will be, it is worth considering that as we are only two months away from election Fed’s move (if it is big enough) could redirect from Obama’s economic failures and also potentially save Bernanke’s seat, as Romney’s hints on several occasions were less favourable to Bernanke. One thing is for sure though; it is going to be an interesting and potentially volatile trading session today, so good luck with your trading!