Monday, April 05, 2010

Emergency Fed Meeting: Bull Killer Or April Fools?

On Friday, April 1st, I was advised that the Federal Reserve Board will be holding a previously unannounced meeting to review and determine advance and discount interest rates on Monday, April 5th at 11:30 AM. I was first notified of the meeting by the notorious and very controversial economic and hedge fund blog, Zero Hedge. Without hesitation, I instantly thought this was some kind of April Fools joke by a prankster embedded inside Zero Hedge. I know these guys are dialed into some fairly high levels of information flow but being April Fool’s day it had to be a joke, right? The FOMC minutes are on Tuesday, why on earth would a meeting be needed on Monday unless some kind of major change is underway? Checking the major news outlets over the weekend, I have found nothing about this meeting. However, multiple blogs and trading sites have picked up on the news. Feeling very concerned, I went directly to the Federal Reserve’s website to confirm or deny this troubling rumor. Lo and behold, I discovered that the meeting is actually taking place! The following is directly from the Feds site:

Advance Notice of a Meeting
under Expedited Procedures
It is anticipated that a closed meeting of the Board of Governors of the Federal Reserve System at 11:30 a.m. on Monday, April 5, 2010, will be held under expedited procedures, as set forth in section 26lb.7 of the Board's Rules Regarding Public Observation of Meetings, at the Board's offices at 20th Street and C Streets, N.W., Washington, D.C. The following items of official Board business are tentatively scheduled to be considered at that meeting.
Meeting date: April 5, 2010
Matters to be Considered:
1. Review and determination by the Board of Governors of the advance and discount rates to be charged by Federal Reserve Banks.
A final announcement of matters considered under expedited procedures will be available in the Board's Freedom of Information and Public Affairs Offices and on the Board's Web site following the closed meeting.
For more information please contact: Michelle Smith, Director, or Dave Skidmore, Assistant to the Board, Office of Board Members at 202-452-2955.
Supplementary Information: You may call 202-452-3206 beginning at approximately 5 p.m. two business days before this meeting for a recorded announcement of any bank and bank holding company applications scheduled for the meeting; or you may contact the Board's Web site at for an electronic announcement about applications and other expedited items, as well as procedural and other information about the meeting.
Dated: April 1, 2010

Unless Ben Bernanke and the boys are playing some kind of prank, it looks like this meeting is actually going to be happening. Traders need to be extremely vigilant Monday morning until the results of the meeting are known. A rate change sending the markets into chaos may be the short term fruit. Be extremely cautious!!


VIPER said...

Surf still in that Euro trade ??

The Questioning VIPER

marketsurfer said...

Hey Viper,
Nice to hear from you. No, I was shook out of that trade and am currently FLAT.