Fed Rate Cut??????? Isn't the market only where it was in May? Grow some balls people. I thought you big tough American traders had balls (Obviously not)
Calling for an immediate cut is ridiculous. If the Fed would indeed cut within the next three months they would have undermined 110% of the tiny bit of credibility they have. A Fed with no credibility is worse than a couple dozen builders, lenders and hedge funds blowing up. I see a high probability of the USD getting trashed to record lows in that case. They can't go out talking about how inflation is a big concern and how housing is a contained problem just this week and then cut overnight. If they cut they have to a) acknowledge a major threat to economic stability b) prepare the market for an impending change in Fed policy IMO too many people hoping for a 1998 style bail out. It doesn't mean stocks will goto zero. Sooner or later there will be big opportunities on the long side, just I think right now the focus should be on protecting capital until the smoke clears (if it does) over the next couple months.
Yes, because all other CBs were ALSO at 1% or around there. Do yourself a favor, mate. Go learn about interest rate differentials, yield...oh, I don't know...the "Carry Trade"? Some good reading material. There will be NO rate cut. There will be NO rate rise. No matter how many of these threads there are. Cripes, it's like you guys think Bernanke reads ET or something.
Full disclosure: I thought they were stupid to go over 4.25, and then just crazy to go over 4.5 back when they were raising. All this did was make it easy for the Chinese to keep the yuan undervalued, without having any effect on the credit situation here in the US, since long rates never did respond to the rises. This was a sign, and to me is still a sign, that Bernanke is an academic fool with no idea of how the real economy works. However, they do have to prep the markets if they're going to cut. Having dug a big fat hole for himself, he can't climb out of it by throwing the dollar down to the bottom of the pit and using it to get himself out. That would only prove just how incompetent he actually is. Of course, if Bear goes belly up and this causes the credit markets to seize up, he'll be forced to anyway. That will cause some interesting times for the dollar, indeed. Also, recall that the jobs report was weaker than expected. It would be a tattered fig leaf, but it could be used to at least try to keep the markets from trashing the buck, should he be forced to cut.
you must be joking. current crisis happened because rates are too low, inflation is out of control. Iraq war and irresponsible tax cuts for rich just added. Now only a rate rise can save current situation. Through recession but that's only solution to deflate credit bubble When everyone rises US can't afford to cut.
If the FED cuts rates who will continue to buy our worthless bonds and treasuries. Without a decent yield why would anyone invest in the only company which has not been held accountable for costs over the last 150 years. Someone once said "History has a way of repeating itself for those who are ignorant to it" I will have faith in our Goverment again when they take on China's policy of dealing with crooked officals.
No, not joking. The long-term potential growth rate of the US economy is around 4 to 4.5%: 2.5 to 3 for productivity, 1 - 1.5 for labor market growth. If you raise rates above 4.5, it means you think inflation is a problem. I know everyone here thinks it is. Or at least it seems that way. Whatever. The bond market disagrees, as it has spent the last year or two inverted or flat. At no time have long rates signalled any real concern over inflation. I'll take the opinion of bond buyers who have to take inflation risk into account every time they put their money down, thank you. They have fairly yelled at the Fed for the past couple of years about how high short rates are relative to where they should be. But like I said, they can't cut now, not without doing some major prep work. Else it's look out below for the dollar.