FOMC Statement 09/18/07
Full Statement "The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 4-3/4 percent.
The Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 5-1/4 percent.
...the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally.
Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.
Developments in financial markets since the Committee’s last regular meeting have increased the uncertainty surrounding the economic outlook."
The Nattering One muses... Last week, we raised the possibility of a 25 bps cut, followed by no cut Oct 31st.
All along, we've stood on Bernanke taking a "hard stick" to the markets, vis a vis, no cut until being forced on Oct 31st.
Apparently, the Fed's perception of the situation is much graver than most anticipated, forcing a 50 bps cut in both fed funds and the discount rate.
Expect the dollar to decline and crude oil to go above $90, exacerbating the already rampant stagflation is the supply chain, thus hemming the Fed in even further.
The questions are: How much leeway does the Fed have for a rate cut Oct 31st? What will happen if the Fed does not followup with another cut Oct 31st?
The Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 5-1/4 percent.
...the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally.
Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.
Developments in financial markets since the Committee’s last regular meeting have increased the uncertainty surrounding the economic outlook."
The Nattering One muses... Last week, we raised the possibility of a 25 bps cut, followed by no cut Oct 31st.
All along, we've stood on Bernanke taking a "hard stick" to the markets, vis a vis, no cut until being forced on Oct 31st.
Apparently, the Fed's perception of the situation is much graver than most anticipated, forcing a 50 bps cut in both fed funds and the discount rate.
Expect the dollar to decline and crude oil to go above $90, exacerbating the already rampant stagflation is the supply chain, thus hemming the Fed in even further.
The questions are: How much leeway does the Fed have for a rate cut Oct 31st? What will happen if the Fed does not followup with another cut Oct 31st?
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