President Barack Obama nominates Janet Yellen for Federal Reserve Vice Chair, October 9, 2013.
It's day nine of the government shutdown.
First, the scoreboard:
- Dow: 14,802.9 , +26.4, +0.1 %
- S&P 500: 1,656.4, +0.9, +0.0%
- NASDAQ: 3,656.4, -17.0, -0.4%
And now the top stories:
- We still have no budget deal, so the U.S. government continues to be on partial shutdown. And even worse, the impending October 17 debt ceiling goes unresolved. In an interview with CNN today, Sen. Tom Coburn (R-Okla.) said that failing to raise the debt ceiling would not inflict economic disaster. He added that a "managed catastrophe" of breaching the debt ceiling might be necessary.
- One uncertainty, however, has been removed. Today, President Obama announced his nomination of Federal Reserve Vice Chair Janet Yellen for Fed Chair. "I am honored and humbled by the faith you've placed in me," she said to Obama.
- "Ms. Yellen is certainly the candidate with whom financial markets are most familiar with," wrote UBS's Kevin Cummins today. "The level of familiarity with Ms. Yellen likely reduces the uncertainty around the transition from Chairman Bernanke (although we believe a general increase in uncertainty is normal during transitions). We do not expect the Fed's reaction function will to change significantly under Ms. Yellen."
- At 2:00 p.m. ET, the Fed released the minutes of its September FOMC meeting. This was the meeting where the Fed shocked the markets by announcing no tapering of its $85 billion large-scale asset purchase plan. There were no big revelations from the minutes: "[A]ll members but one judged that it would be appropriate for the Committee to await more evidence that progress would be sustained before adjusting the pace of asset purchases. In the view of one member, the progress to date in labor markets and in broader economic conditions amply supported a reduction in purchases... But with financial markets appearing to expect a reduction in purchases at this meeting, concerns were raised about the effectiveness of FOMC communications if the Committee did not take that step."
- "Bottom line: the minutes were dovish and it will take a noticeable improvement in the data, in particular the labor indicators, for the Fed to initiate tapering of QE this year," said Deutsche Bank's Joseph LaVorgna.
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