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Interest Rate Cuts--Please!
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I love the effect anticipation has on the economy. The mere whisper of an idea that the Fed might cut interest rates in December was enough to boost the lagging stock market today. True, there was other good news, like a decline in oil prices and the ability of Citibank and Freddie Mac to find extra funding to cover their mortgage problems, but the idea of an interest rate cut seemed to make investors especially happy. The continuing drop in housing prices may have had a dampening effect, but an interest rate cut would be helpful in that arena, also. As a result of the interest rate cut predictions and other good news, the Dow was up 2.55%. Even struggling stocks like Micron Technology (MU)climbed a whopping 52 cents (6.55%) to $8.46. I am nearly dizzy with anticipation of what would happen if Fed goes wild and cuts the rate a whole half-point instead of the rumored quarter-point, as Jack Ablin, chief investment officer at Harris Private Bank in Chicago, suggested today on businessweek.com. Here's hoping!
About this poster:
Posted by:
vwalker
(female, mid-30s)
(Posted 11/28/07)
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Responses (1)
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Dayahka
(11/30):
If the Fed cuts the interest rates by a half-point, Oil will immediately go above 100USD (which will, in turn, drive up prices for food and, of course, gasoline). It appears that the Fed must decide between bailing out its friends (those who caused the present crisis) and lowering interest rates and increasing inflation, or keeping the rates where they are or raising them and thus help the victims of the housing bubble crisis--and the Fed has apparaently already decided: help the crooks and hurt the victims is their motto.
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