Negative Fundamental Releases ahead of Fed Announcement

Discussion in 'Wall St. News' started by DannyBly1, Apr 29, 2008.

  1. The Consumer Confidence Index fell to a 5 year low, amid soaring inflation reflected in rising gasoline and food prices - and fears of a weakening jobs market.

    Reduced consumer confidence leads naturally to reduced consumer spending. Consumer spending accounts for over two thirds of the US economy. The negative release initially triggered selling in the stock market.

    The Standard and Poor/Case Schiller Home Price Index showed that housing Prices dropped in February at the fastest rate ever.

    Further adding to housing gloom, research firm RealtyTrac Inc. announced that foreclosures for Q1 2008 have more than doubled from Q1 2007.

    The employment market has been weakening - the labor department reported a loss of 80,000 jobs in March and is expected to show another loss of 65,000 in the April Employment Report this Friday.

    The recent strength in the US Dollar has contributed to the recent weakness in crude making it a less effective hedge against inflation.

    The Federal Reserve is widely expected to cut rates by 25 basis points tomorrow and to then cease the rate cuts for the rest of the year.
  2. Wonder what would happen if Gentle Ben raised rates. Maybe a recovery?
  3. my view entirely.

    rates need to go up quite simply.

    the longer they leave it the more chance they will be forced to do a 'volker'.

    when oil is trading above $150 and most food commodities are trading at highs then the fed might reckonize that the rate cuts were a policy error.
  4. maxpi


    The tax rebates are about to hit the economy. They are a $25 Billion dollar injection into the economy at the street level. They will create hundreds of thousands of jobs. I would wait and see how that plays out. The Fed cuts were the only choice they had to deal with the subprime problem, the cheapest and best place to fix the problem was right at the homeowner payment level.

    All you jokers on ET that are smarter than the fed should.........