Whether the Fed acts, hints, or says nothing of real importance today, the chart below suggests that conditions are ripe for a massive liquidity injection.
Chart 1: ISM Prices Paid Index (PP) to National Purchasing Manager's Index (PMI) Ratio:
Headline: U.S. ISM survey remains below 50% in July
WASHINGTON (MarketWatch) The U.S. manufacturing sector remained in a weakened state in July, according to the closely followed ISM index. The index was basically unchanged last month, edging up to 49.8% from 49.7% in June, the Institute for Supply Management said Wednesday. Readings below 50% indicates more manufacturers are contracting instead of expanding. It's the first time the index has been below 50% for two straight months since the end of the last recession in mid-2009. Economists surveyed by MarketWatch had forecast the index to edge up to 50.2%. The new-orders index rose slightly to 48.0% from 47.8% in June, but the employment index fell to 52.0% from 56.6%Source: marketwatch.com
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