The Fed Moves to Help ETFs and the Markets
August 10th at 3:11pm by Tom Lydon
The Federal Reserve has intervened on the market’s and exchange traded funds’ (ETFs) behalf several times this week. It injected $24 billion in temporary reserves to the U.S. banking system yesterday and $38 billion total today in the attempt to squelch credit concerns, according to Jeannine Aversa for the Associated Press. The Fed added $19 billion this morning, then another $16 billion and another $3 billion in the afternoon.
Because of all the money injections, many wonder why the Fed left interest rates unchanged earlier this week. However, rumors are spreading that the Fed might be forced to do an emergency inter-meeting rate cut within the next week, according to Joseph B. Shatz, a Merrill Lynch analyst in a Wall Street Breakfast’s Pre-Market Snapshot segment. Should this occur, it will significantly affect the market, as well as SPDRs (SPY), which has been teeter-tottering on its trend line lately. It’s flat today.
