Rate cut rumours

Discussion in 'Trading' started by FGBS, Aug 21, 2007.

  1. FGBS


    Anyone heard anything about the rate cut rumours as Bernanke and Paulson get talking?
    Apparently a large US bank has warned its customers that rates will be cut after the meeting.

    Anyone else have anything to add?
  2. When are they meeting?
  3. Heard about Bernanke renting helicopter...:D :D :D
  4. I'm buying stocks in a paper company. Anybody know who makes the paper Ben will need to print the zillions of dollars on to get out of this mess?
  5. FGBS


    Company is called Kleenex owned by Kimberly-Clark... bloomberg tickers is KMB US
  6. anyone actually read the statement.

    i know i did not.

    i just assumed same as everyone else.

    but according to this statement the rate cut is only temporary and can be taken back.

    on previous rate cuts the word temporary was not present in the statement.

    i checked and this is the case.

    it is only present in this statement.

    also as they did not cut the fed funds rate the market may have got this one wrong.

    so there is the possibility as that the discount rate cut might be taken back.

    here below is the statement.

    To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee's target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks' usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower. These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York and San Francisco.

  7. FGBS


    Very true, the rumour I heard now is that they are ready to cut the fed funds rate...
  8. I haven't heard the rumor but thy have no choice now. Credit crunch is bad....only thing is what does a rate cut do if nobody wants to hold MBSs?
  9. China just increased the rate.


    China Raises Rates for a Fourth Time This Year to Cool Economy

    By Nipa Piboontanasawat

    Aug. 21 (Bloomberg) -- China raised interest rates for a fourth time this year to cool the world's fastest-growing major economy after inflation and money supply surged.

    The benchmark one-year lending rate will increase to 7.02 percent from 6.84 percent, starting tomorrow, the People's Bank of China said today on its Web site. The one-year deposit rate will rise to 3.6 percent from 3.33 percent
  10. FGBS


    Dodd is scheduled to speak after his meeting with Paulson and Bernanke at 16:00 london time.
    #10     Aug 21, 2007