Bad Econ Data Might Fuel Fed Cut

Discussion in 'Data Sets and Feeds' started by S2007S, Oct 30, 2007.

  1. S2007S


    Dont worry I think the market gets that nice .25 basis point cut everyone is crying for, and then maybe the DOW closes at historical highs tomorrow afternoon. Cant wait for this rate cut, going to prop up stocks even higher and help the dollar out greatly......maybe it will push oil to 95 by the end of the week as well......going to be an interesting ride tomorrow afternoon.


    Bad Econ Data Might Fuel Fed Cut
    Steve Schaefer, 10.30.07, 1:30 PM ET

    Consumer confidence declined to its lowest level in two years in October, prompting concerns on Wall Street leading into the holiday season.

    Coupled with still-declining housing prices and a rise in unemployment last week, the consumer confidence report is another piece of disappointing data the Federal Reserve will look at as it meets this week.

    The Fed is expected to announce Wednesday whether it will take another hack at interest rates, and many Fed-watchers predict a 25 basis point cut.

    Doug Roberts, chief investment strategist at Channel Capital Research, told Monday that he expects a quarter point cut to both the federal funds rate and the discount rate. The cuts, Roberts said, will stem from the unemployment numbers, which have a domino effect as they tick up, impacting other parts of the economy, such as the housing market. Roberts suggested that in addition to cutting rates, the Fed will adopt a stout warning that this will be the last cut for some time, in order to appease the bond market.

    It remains to be seen if the Fed will confirm the rampant speculation with a 25 basis point cut, and investors were trading cautiously ahead of the Fed’s decision, expected Wednesday. (See: "Rate Cut Round Two")
  2. If they don't out!!!!!
    Markets want .25 badly.
  3. Consumer confidence isn't as important anymore due to globalization and the lessened importance of the US consumer. Also, there is no evidence the US consumer has stopped spending. The fed will cut rates, but not regarding consumer confidence.
  4. S2007S


    You know what it is, its that they really want .50, but know they wont get it so they will rally the markets even on a .25 cut which has been for weeks, ALREADY PRICED into these markets.
  5. Bowgett


    Markets will rally period. 25 or 50. It doesn't matter.
  6. The upside is unlimited. Shorting is like stepping in front of a train.
  7. We'll get a cut. The statement will be what really moves the market. If we get a "don't expect us to cut anymore" impression, or if inflation becomes the most important aspect again, of anything hawkish at all that underlies why cutting is no longer an option, then look out. Negative reaction.

    The only thing the market has left is Uncle Ben. And once he indicates "tough love", then there's no more prop up.

    If we get a cut and the same ol' "Fed stands willing to (bend over and give the market what it needs) react to markets" type of statement, then the party continues. Why wouldn't it? Free money!
  8. S2007S


    When it gets to the point whether its a .25 or .50 that rallies the market, we have a problem.