This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Can Fed Hawks Win in 2013?

NEW YORK ( TheStreet) -- Maybe the hawks will snatch their target in 2013.

Minutes from the latest meeting of the Federal Open Market Committee -- the Federal Reserve's policy-making wing -- revealed that members were mixed about how long the central bank's longer-term Treasury bond and mortgage-backed securities purchases should last.

A few members, the minutes said, felt that the monetary stimulus should remain in effect until the end of 2013, "a few others" reiterated a commitment to considerable accommodation, while "several others" felt that the Fed should slow or stop the programs well before the end of the year.

As economic indicators in housing, manufacturing, the labor force, retail and other areas show signs of strong to steady improvement, the hawks who are calling for an end to open-ended purchasing programs by the central bank may finally have the data to back up their calls.

"My own take is that we will see enough of an improvement in the labor market by the latter part of this year for them probably to stop the asset purchases," said Josh Feinman, global chief economist at DB Advisors. "It's the economy getting a little bit better, and I think it will continue to get a little bit better and if it does then I can imagine by the second half of this year that the Fed would be thinking about maybe to scale back the asset purchases."

Fed Chairman Ben Bernanke has been one of the biggest proponents of the open-ended -- without a specific expiration date -- quantitative easing measures rolled out by the bank.

But the latest minutes suggest growing opinion that expansion of the Fed's balance sheet may not be necessary for much longer. Though inflation has remained in check, some critics have argued that all the buybacks could create serious inflationary pressures in the long term.

"I kind of lean towards we're getting to the point where enough is enough and I just think that we're really afraid of taking our medicine, because medicine is not going to taste good, and I understand that nobody wants that," said Allan Flader, a financial adviser at RBC Wealth Management.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs