Fed Hints At Further Rate Cuts
In a speech today Feddy Reserve Chairman Ben Bernanke suggested that even steeper interest rates could be in the works. His strong language suggests that they're considering a half-point drop, down from the current rate of 4.25%. If they follow through, the cut would be expected to be announced at the next Reserve Board meeting on January 29th. Last time rates were cut we took a look at how it affects the price of a bushel of corn in Kansas, i.e., you the average consumer, and another rate cut would be more of the same.
Chairman Ben S. Bernanke At the Women in Housing and Finance and Exchequer Club Joint Luncheon, Washington, D.C. January 10, 2008 [FederalReserve.gov]
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I think the Fed is responding to the markets and not what's best for the average consumer. The markets want assurances of cheap cash to help alleviate the credit crunch. The average consumer will definitely pay more for hard-to-live-without items (like food) if rates are cut. It doesn't help that a couple of recent articles in the WSJ claimed that Americans are absorbing the high cost of oil without flinching. Most of them only addressed gasoline pump prices, not the impact of higher oil prices on things like food.
Jesus H., this is getting ridiculous. Everybody refinance!
Dont forget, he killed a 100+ point rally when he said it. The market almost immediately gave up all its gains today before rebounding late.
Mr. Bernake, just click your ruby slippers together and say "there is no recession, there is no recession."
@DanPVD: They can't (leave things alone)...then their big business buddies would take it up the ass instead of us taking it up the ass ("like it's supposed to be")
To be fair, a large amount of our current inflation is being driven from abroad. The US Federal reserve doesn't have the ability to control price inflation on imported goods and is trying to keep things on an even keel using the tool they feel will be the most effective.
I'm not a huge fan of Bernanke, and the fed has kind of been clueless as of late, but I think they get more flak than they deserve because they are an easy target.
Please, please no! All this is going to lead to is more inflation. Seriously, the government should sometimes learn that doing nothing and letting the market adjust itself is the best thing.