Thread: Will Fed Do The Unexpected And Leave Rates Unchanged!!

Originally Posted by ;

The US want a lesser dollar as it lowers their obligations, also.

I totally concur with you, evem if secretary Paulson yels daily which US needs a stronger dollar.

From my point, untuil the financial troubles, Fed said it's best risk is inflation (they where saing it for 6 month) and when the economy appeared, suddenly the risk of inflation disappeared, even if most of comodities prices are raising. Not to menion the enourmos amount of cash they pumped into the computer system. Strange isn't it?

Again, in my point, in the current situation I don't see any rate-cut any soon, but neither a rate-increase

I agree there should not be a rate cut. But, Bernie failed to establish himself as the strong scholar.

Inflation is high in the US, the amounts are rigged IMO. Oil is almost $100, commodity prices are higher than last summer, and you have a dollar which increases import prices. . .How can inflation be reduced???

Anyways, the stock market pimps will get their cut and Bernie the whore will provide it to them.

Poor times for the dollar.

I believe they will cut 0.25 or no cut, I expect for a cut...

I suppose no cut because the Fed need a little more time to evaluate the impact on the last large rate cut...

Hmm... interesting to see different meanings. I will stay out of those markets before thursday.

Regards -

Originally Posted by ;

BTW: The US want a lower dollar as it enriches their obligations, too.

,

Before I disagree with you, I would appreciate it if you extrapolated about that.


BTW, the market has priced a 25 bps cut at 80% now. . .we are due for some strong short-term turbulence if they don't cut anything.

There's no prospect of there not being a rate cut. The markets have priced it in and it would be quite damaging to the US Domestic Markets if there wasn't any cut.

It will be a quarter point (25), since there wasn't enough time between the previous rate cut to see the effect that the very first cut has had on the market.


I concur with all the original posting that if there's NO cut there'll be a correction 300 pips on the Euro. I believe that if there's a half point decrease , then the euro is going to be pushed even higher against the dollar.


A weak dollar is good for American industry at the moment, becuase it will help keep jobs in your home and raises demand for American goods.

For political reasons it will help to post a very low trade deficit each quarter, and with the cost of the Iraq war being financed on loans, a weak dollar also offsets hefty intrest rates we are charged on those loans.


I will wager my life (although not my money lol) on a .25 rate cut, news traders will kiss the USD reduced for approximately 3 hours, and then a hefty USD rebound after profit taking and individuals realizing that the the EUR is overvalued and the rate cut wasn't half point that the news traders desired.

http://www.marketwatch.com/News/Stor...-47C972B479E9}

Originally Posted by ;

The Fed would be insane to not reduce interest rates. We need to spur consumer spending, particularly for the holidays. With the price of oil just
days from $100 a barrel as well as the mortgage catastrophe looming, we need some
economic expansion. I cannot find any inflationary pressures. My
wager is for the Fed to reduce rates by 50 points....

You've got me confused here a bit. FED would certainly get oil above USD 100 and keep it to quit absorbing the costs of oul prices and begin passing it. This certainly would wipe out any profits for the consumer concerning a cheaper credit (and it's the consumer who is the questionmark in this game). At precisely the same time, the outflow of cash denominated in USD adjusted assets would transform into a flight, sending the industrial rates greater (rather than lower) - hence really adding to the charge catastrophe rather than helping to solve it.

ADP jobs and GDP were good. I think it's going to be 0-25 bp. 0% likelihood of 50 bp cut I think.