My guess is he will panic, he will cut 50bp and the market may rally. The bears will almost be in charge after that cut. Once he is out of cuts its pretty much over. The earnings for Q3 are going to suck and the market may free fall. If the fed was wise they would stand pat.
Amen to that. But they won't. Inflation numbers have significantly come down, so they have room for a 1/4 point cut. Of course, this will be expected and move markets little (see last cut). Pay$ <b>If the Fed was smart they would realize that it is not their job to save stock prices.</b>
If Bernanke is smart (and history repeats itself), he will do 50bp right now, then save an extra 50bp + some new program he invented for options expiration friday... but thursday night of course!!!!
You and the rest of your Bernanke Basher buddies here on ET should be so pleeeeeassed!!! All Ben did was talk about remaining vigilante against INFLATION. Nothing whatsoever about Lehman, Wachovia, Wamu, or AIG. I guess Ben now thinks that AIG isn't "big" enough to fail . . . Go figure. The only have a $150 BILLION DOLLAR REPO COMING UP! This situation is so much worse than 2003, and yet look where Ben has rates? LOL!
Notice how few of the usual ET suspects are whining about the Fed 'printing money 24/7 creating rampant inflation' recently? Of course, the Bernanke bashing will never stop. You can't please these clowns. Market has 10y CPI at 1.6%, the lowest since January 2003, the height of the deflation panic.
Two adds Wag. I think the market was happier than not at the statement and I think the Treasury will supplant the Fed on AIG. Congress seems to be getting itchy. They can hack at a plan from Paulson easier than at Bernanke. Our buddy Rangel can now chime in....