The Federal Open Market Committee (FOMC) had its latest meeting last week. As expected, no significant policy change resulted from the meeting. The Federal Funds rate remained at virtually zero and the Treasury will continue with the purchase of agency papers and Treasury Securities initiated in March. That the benchmark interest rate remained unchanged is no surprise because it is already as low as can be. The continuation of the security purchase plan could be interpreted either way depending on whether you’re an optimist or a pessimist. Either the FOMC thinks the economy has stabilized enough that no increase is necessary or there’s not enough improvement in the economy to warrant scaling back purchases yet. Read more...

Is this the rally we’ve been waiting for? While the markets have been oversold and the buying action today seems to be very strong, we would refrain from calling the bottom just yet. However, one element of a rally is indeed present – the market is reacting to a relatively small piece of good news and is leaving behind most of the negativity of the latest labor numbers, at least for today.

The biggest action today is in the financials, following some rare good news out of the sector. Citigroup’s CEO disclosed that the company has been profitable in the first two months of the year and that its revenues were $19 billion. Of course, the figure doesn’t include potential one-time write-downs which are becoming a tradition, but at least the announcement breaks a string of terrible news out of the finance industry. Read more...