Weekly Financial Review
Fed lays out mixed path forward.
Bryce Knorr
Published: Jan 31, 2012
Over the past couple of years at presentations to farmers, I've usually included a slide showing the longterm trend in the prime interest rate. Noting the historically low reading, the headline says there's only one way to go: up.
While that logic still holds true, it appears the Federal Reserve will keep the plate of low rates spinning for a good long while. In its latest statement on monetary policy the central bank said it will keep its target for short-term Federal Funds "at exceptionally low levels" into late 2014. Previously, the Fed's target was mid-2013.
The news, along with the bank's vow to keep "twisting" long-term rates lower, set off a predictable reaction. First, prices on Treasury bonds, which move the opposite of rates, jumped higher. At the same time the dollar plummeted. Finally stocks rallied, taking aim at highs from May 2011.
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Senior Editor Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Advisor. He conducts Farm Futures exclusive surveys on acreage, production and management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on www.FarmFutures.com he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.
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