Exchange traded funds could see big swings and trading volume on Friday as markets focus on any hints of further quantitative easing from the Federal Reserve in a speech by Fed Chairman Ben Bernanke.
ETFs have seen volume rise during the recent market turbulence. [ETF Trading Volume Spikes with Volatility]
Investors will be looking for the Fed’s views on the economy and the chance of more stimulus as Bernanke gives an address at the Kansas City Fed Symposium in Jackson Hole.
“The Federal Reserve remains in the spotlight, with many observers wondering what, if anything, Fed officials can do to help promote economic growth,” said BlackRock strategists in a report this week.
“To start, it is important to remember that the Fed has already done quite a bit — it’s announcement that interest rates will remain at a near-zero level for the next couple of years was a dramatic statement and one that many would classify as a de-facto form of easing,” said BlackRock, which manages the iShares ETFs.
The Fed has promised to keep its target interest rate for overnight loans at record lows until mid-2013.
However, there is speculation the Fed may take further steps due to weak economic data, the recent sell-off in stocks and commodities, and the Eurozone debt crisis.