Federal Open Market Committee Meeting Comes at Pivotal Point for US Economy

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Don Hays of Hays Advisory comments on today’s FOMC meeting and the Fed's potential decision to further stimulate the US economy.

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“Bernanke is a superior student of history, and not only has he learned those lessons well, he also formulates plans based on what history has taught.” – Don Hays

With the FOMC meeting beginning this morning, Federal Reserve Chairman Ben Bernanke is taking a lot of heat from the public; however, Don Hays, founder and chairman of Hays Advisory, believes that he is the right man to get the US economy back on track. Hays recently stated, “Bernanke is a superior student of history, and not only has he learned those lessons well, he also formulates plans based on what history has taught.”

Hays believes that during the Fed’s two day meeting, Chairman Bernanke and his team will flesh out all of the possible solutions for stimulating the ailing US economy in the short-term, while retaining their long-term perspective on the economic recovery. According to many analysts, one potential outcome of this week’s meeting is that the Fed may attempt to push down long-term interest rates, which would likely have an impact on mortgage rates causing them to move lower.

This prospect excites Hays, since for some time now he has been a strong advocate for focusing any further stimulus towards the housing sector as its weakness is the largest factor holding back US economic growth. In a recent interview with Matt Nesto of Yahoo! Finance, Hays stated, “Housing and autos are typically the areas of the economy that lead US recoveries.” Yet, this time around, the housing sector has recovered very slowly.

While Hays also suggested in his interview that stimulus for the housing sector was more likely to come from Congress, he is pleased with the idea that the weakest link of the economy may be positively affected by any actions the Fed may take to stimulate the economy. At this point, all eyes are on the Federal Reserve as investors and the public await Wednesday’s announcement following the conclusion of the FOMC meeting.

About Hays Advisory, LLC

Hays Advisory produces stock market and economic analysis for individual and institutional clients that is both widely followed and internationally recognized. Subscribers may gain insight from Hays’ disciplined, unemotional approach and a better understanding of the factors that are driving long-term market trends.

In addition to providing research, Hays Advisory manages an assortment of investment portfolios focused on domestic, international, and global equities, along with two new portfolios that seek consistent returns and downside protection by investing across multiple asset classes.

At the core of the research and asset management business, is a time-tested tactical asset allocation model. This disciplined approach is designed to move more assets away from stocks when the model indicates higher market risk and allocate more assets to stocks while in the early stages of the up cycles.


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