Federal Reserve monetary statement may stabilise market

Taiwan Sun
Tuesday 9th August, 2011  

  •  Dow Jones industrial average, S&P 500 and Nasdaq suffering volatility
  •  US Federal Reserve monetary policy anticipated by investors
  •  Fears growing of a double-dip recession

 

US markets were set for potentially volatile trading Tuesday ahead of a monetary policy statement by the US Federal Reserve following Monday’s single worst day of trading since the 2008 crash.

Futures on major indexes swung dramatically between positive and negative territory ahead of the opening of trade on the New York Stock Exchange with the Dow Jones industrial average, S&P 500 and Nasdaq suffering volatility.

On Monday alone, around US $1 trillion was wiped from the value of US markets, while over the past two weeks, stocks have dropped around 15% on the back of growing fears that the US economy is slipping back into recession.

The Federal Reserve was due to make a statement on monetary policy Tuesday afternoon and that will likely have an immense impact on the market as investors will be hoping for a signal from the reserve that it will take steps to stabilise the markets and revitalise the slowing economic recovery.

As stock markets around the world plunge, the Federal Reserve will need to reassure investors that the world economy is not heading into a US-led double-dip recession.

@ColonelSixx