More Jawboning

Monday, stocks closed in Asia and the U.S. virtually unchanged on light volume. In Europe, they fell 0.3%. Despite the lack of price action in U.S. stocks, the VXO fell 8% to close at 13.52 and the 10-Year U.S. Treasury Bond yield climbed 3% to close at 1.92. Tuesday, the big news came from Belgium as terrorist bombs killed about thirty people. Stocks in Asia closed up 0.6%, but in Europe and the U.S they ended little changed on light volume. The VXO rose 5% to close at 14.16.

Wednesday, stocks reversed course in Asia and fell 0.7%. Again in Europe, stocks closed little changed. In the U.S., stocks fell 0.6% on light volume. The VXO rose 6% to close at 15.02. The 10-Year U.S. Treasury Bond yield fell 3% to close at 1.88 while precious metals lost 3% and their miners lost 4%.

It should be clear by now that the FOMC is trying to slowly let the air out of the stock market. The euphoric move of recent weeks has propelled stocks above the target level the Fed desires. They trotted out two speakers yesterday and one today to tamp down expectations and raise the possibility of a rate hike for the next meeting. Of course, this amounts to arrogant and delusional micromanagement of the stock market.

Thursday, stocks continued to tumble in Asia — this time falling 1.5%. Stocks also fell 1.5% in Europe, but in the U.S. they closed little changed on light volume. Precious metals miners recovered a bit by closing up about 2%. Friday, stock markets were generally closed for Good Friday.

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