The Fed and Economic Divergences

Discussion in 'Economics' started by Joab, May 8, 2007.

  1. Joab


    I just realized that the last time the Dollar was this low the Fed started hiking !!!

    Add to this

    Terrible GDP numbers
    Terrible Housing numbers
    Inverted Yield Curve
    Luke Warm Employment numbers

    All arguments that the economy is slowing so ... now we have divergence.

    Weak Dollar
    Slowing Economy
    Bull Market Euphoria

    What do you think tomorrow's report will bring???
  2. Joab


    no comments ???
  3. Extra volatility in comparison to past FOMC announcements.

  4. Digs


    Sooner or later the smart thing to do is slow down or stop the asset price explosion.

    DEBT levels are way to high...
  5. Same happens tomorrow as has been happening last few meetings of the FOMC.

    Got to inflate the debt away!!!!!!!
  6. Joab


    Good point !
  7. piezoe


    I just realized that the last time the Dollar was this low the Fed started hiking !!!

  8. add to that the fact that the fed usually lowers "AFTER" major recessionary periods are acknowledged and "AFTER" stocks pull back steeply from high points.

    You have a pretty good likelihood that they aren't going to cut any time soon.

    They may do nothing, so as not to startle the market. But it's doubtful, contrary to most of the cheerleaders, that they would start cutting IMHO.
  9. BENG


    My take: no change.

    If they can't pull it off by lowering the rate later in the year, then two things would happen:

    1. Hyperpinflation
    2. Stagflation
  10. Joab


    Great comments:

    We still have not addressed the issue of the Divergence.

    How do you see this melt up playing out ?

    14,000 and burst or do we stall here ?

    Tomorrows language will set the tone that's for certain.
    #10     May 8, 2007