Will the fed stop or pause raising interest rates on Sept 20th FOMC Yes - GDP growth has been hit - High Oil prices - Massive job losses in the South - Political pressure from G Bush No - West and East coast Housing prices still too high - Fight Inflation - Give the wrong signal the economy is weak - Too early to make the call, What do you think ???
Look at a ten year chart of the ten year bond. It is in a raging bull market. (Prices up - yields down) Next year the ten year could range between 2 3/4 and 3 3/4 % if we only go into a mild recession. Who knows where we will be if we get ourselves into a steep recession. What brings on the steep recession. The underfunding of pension plans. Virtually all companies with Defined Benefit plans are or will be be underwater due to actuarial assumptions of 7-8% returns -- they are only getting 3-5%. Corporate earnings are going in the tank next year due to 'unexpected funding requirements' (this is the phrase many CFOs will be using when they announce 'one time' charges to earnings). Expect deep earnings hits and bad markets as a result. The interest rate market has a way of looking out way into the future -- The ten year is telling us "things are not looking good! The fed is done!
I agree, but you are asked to judge the FED next action, they have said that they dont care about and inverted yield curve !
I thought the Fed was just removing accommodation, not tightening? They should not have gone to 1% in the first place. I think all the talk about a pause is just the same people getting ahead of themselves all over again
According to the Fed Funds contract, Sep & Oct should remain at 3.5%. Nov is expected to be at 3.75%. March or April could see another tightening to 4.0%.
doubt the fed is done. i think they will talk about being done first. there is greater transparency now at the fed. a signal of rates ending is almost as good as ending. 1-2 more raises, i think. a lot comes down to the economic fallout of katrina.
I stopped trying to read Mr. Bubbles's mind a few years ago. So, in response to your poll, it is not that I don't give a S**T. Rather, I just don't know whom to give the S**T to, since Mr. Bubbles has already been operating at pant load capacity for years.
Nope. Sorry. Greenie has said that the long bond yield is going up come hell or high water. And he doesn't care what recession he has to start to do it.