So the money markets price in 100% 25bpts and 50% of a 50bpts cut. Personally I think it would be a mistake by the fed to cut as it would create moral hazard similar to that of the �Greenspan equity put��� but I�m not making the decision!
Seems anyone that has sneezed near a member of the FOMC has come out with opinion so I wondered what the consensus of babypips was?
I�m going to punt that there will be a 25bpts cut and hopefully that should disappoint�. And then I�m hoping that they might see sense and decide no cut which will really disappoint.
As I don’t trade news events, the only thing I know is as far as Forex is concerned, with something this major I am pulling out all my positions in the A.M.
As we all know our brokers will screw us on the spreads anyway
Hehhehe I’m with you on that, especially with so much attention on this meeting today. Didnt trade at all (I closed my acct w/ previous broker) but watching the GBP this morning skyrocket for 200 pips, I know somebody was VERY happy.
The Fed is doing what it feels will stimulate the economy. We have many economic numbers going in opposite directions. Unfortunately the numbers going negative or down are some of the most important, namely homes, jobs and cars lol. One of the talking heads on Bloomberg made a good point today, as far as Sub Prime Mortgage owners are concerned, they’re not going to care much about a Quarter or Half percent cut on a mortgage thats already at 10%, which they shouldn’t have gotten ANYWAY, so we can’t count too much on this cut alone resurrecting our real estate markets. The correction in our Real Estate markets has been LONG overdue.
I think Old Ben is trying to ease some of the pressure off of the economy as a whole, which for some time has been teetering between death and… death. Just from an intuitive stance, the worst is yet to come. The dollar index is already waaaaaay down, nothing is stable right now currency wise… so I think Old Ben is trying to nudge America back towards liquidity, stability and then towards growth. LOL funny part is, when will the “AND THEN” start? Gotta love fiat…
The markets are beginning to heal, but I don’t think we are quite how of the woods yet. its tempting to think the worst is over - conditions are improving, but very slowly. Good news - liquidity is flowing back into the system. But why is it still fragile? To start with, less than 10% of the $100 Billionor so of losses expected from reckless subprime lending have been recognized. Second, inflation could perk up. Bond markets are already getting worried that the Fed’s aggressive interest-rate cut could have that effect. America’s continued reliance on borrowing money from the rest of the world maeks the dollar vulernable.
