The Coming Business Week
April 27th, 2008 by Grant in: GeneralI’ve been aimlessly wandering the business journals for the past couple weeks, and really haven’t been all that excited about the financial markets… until now.
The Fed is set to convene on Tuesday and is expected to announce another quarter point rate cut. Up until the last few days, most have expected a half point rate cut, but it appears the calm in the markets has lowered that prediction to just the 0.25% mark.
What would be better?
I think a pause in the cuts would do the markets even better. Over the past several months, rate cuts have been perceived as a way to help soften the blow of credit and housing problems to the financial markets. Consequently, if the Fed thinks things are starting to bottom out, the easiest way to send that signal would be to make no additional cuts…
If the the rate does fall by another quarter point, the rhetoric from the Fed meeting will be very important. Look for any change in focus on downside risk to growth… it will be very telling.
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