75 bp cut

Discussion in 'Economics' started by kashirin, Jan 11, 2008.

  1. will they really deliver it?
    Fed funds says 40% chance for 75 bp cut

    when was the last time Fed cut 75 bp?

    Why not just to declare dollar dead?
  2. Adobian


    Can Fed cut BP's all the time ? every time ?
  3. Here's my take on the rate cut issue.

    Obviously, Bernanke can't raise. Financial markets would implode & he would be replaced by someone who would immediately cut rates.

    No change - not likely. Would be percieved as being arrogant and out of touch. Also subject to replacement.

    75-100bp cut -not a chance.

    50 bp cut - an admission that things are seriously out of control and that previous analysis was faulty, flawed, or fraudulent. Not happening without a severe equity market meltdown.

    25 bp cut - allows for continued cuts in the near term, and gives the market time to absorb its excesses. Some pain, but not armageddon. The wisest and therefore most likely choice.
  4. 75bp is very likely outcome; just look at the oil market; which is slowing downward; possible for the next week's inflation number; which my bet is lower than mostly expected; cause flat panel tv is soooo cheap now; therefore more room for fed to cut.

    :D ; Fed's job is sooo much easier than trader.
  5. True, most likely just a 25 since they are badly cornered with inflation hence the stagflation going on. Problem is that everyone knows its a bear market now and wants to either
    A) stay on the side and wait for a clear signal or
    B) short the crap out of anything and everything

    So a 25 cut allows bears to start a new round of shorting right away and then what does the 25 cut do for anyone? If they do an aggressive 50 or more emergency rate cut then they maybe scare the shorts with a "shock effect" and create some real stimulus for the market to work with. It's all about their timing. If they do this right in the wake of the bad write downs coming up then it could give them the best bang for the buck, literally.
  6. We will see a major sell off if we only get a 25bp cut.

    75bp cut and Peter Schiff might get an ulcer. Gold to $1200 in a week.
  7. The FED is between the proverbial "rock and a hard place".

    With commodity price inflation finally feeding into everything and the "core" of the CPI they shoud actually be raising rates!!!

    Have a look overseas and you will see that the central banks are on the inflation fighting side. Rates are going up.

    We have to take the medicine because of the FEDs own action of flooding the market with liquidity over the last few years.

    We were well warned....remember the 1.25% fed funds rate and the industry offering 0% credit cards, 0% car loans, 2/28 ARMS with next to 0%......no wonder we are in this mess.

    Sorry guys but I actually believe rates need to go up, we need a recession to force global growth and commodity prices and inflation down.

    Take the pain now or much worse to come with i-rates next year.
  8. Hold on before we get any rate cuts we need to see PPI & CPI. Goldman Sachs stock price is holding frim, no need for .50 or .75 rate cuts so sorry.

  9. i am going to try to be nice even though your analysis makes zero sense. how can you say a 25 bp cut is the most likely after what the markets are pricing in and after what bernanke said? how can you even say no change is "not likely"? there is no chance in hell that bernanke leaves them unchanged.

    anything less than 50 bp and the market gets crushed. if we get 75 then we will be up. if the fed decides to float (highly unlikely) rates then we will skyrocket.
  10. true we need those numbers. they will be huge.
    #10     Jan 11, 2008