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The Fed should start being very clear about where it is going with future rates. Since we're already effectively at the bottom in terms of opportunities to lower them (2 points away from 0%) the Fed should announce that they will temporarily lower the rates and then start raising them to the 10 year average rate of inflation, 1/4 point at a time.
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Last edited by Waterlily; 09-16-2008 at 05:18 PM..
Reason: no blogs
I think they'll hold steady, unless AIG goes under this morning. But they'll make a strong statement about lowering rates immediately in case of emergency. Then when the market continues to tank, financials report more bad news or somebody else goes under, they'll drop them. So my guess is hold today, then lower them within 1-3 weeks. But really, who knows? They're operating at gunpoint.
well, they just injected 50 billion into the markets. This is from bonds they are buying back, so there is no cost to taxpayers. So they are definitely intervening...but just doing an equal exchange, if you will. I say the markets rally in the morning and then collapse again and stay below 11K by closing bell
I don't get this. Isn't the problem we're facing due to too many people borrowing too much and not being able to pay it back? Why would we cut the rates and encourage more borrowing? Doesn't this put us in a bad position long-term?
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