# Will the US Fed cut rates in Sept?



## vishalt (1 September 2007)

In these troubled times current Fed Chairman, Ben. S Bernanke's predecessor, Alan Greenspan, would employ the 'Greenspan put' by cutting interest rates to bail out businesses who feed off credit. 

Bernanke's view is that it's not the Fed's responsibility to do the bailouts, but will "act as needed" to shield the American economy. 

September - usually the worst month for stocks - is going to be very interesting, a cut would surely ensue some rally and maybe some M&A again?

Who knows.. 

vote!


----------



## wayneL (1 September 2007)

vishalt said:


> vote!



They'll cut, but it won't work past a brief euphoria rally.

I'm turning Japanese
I think I'm turning Japanese
I really think so
Turning Japanese
I think I'm turning Japanese
I really think so
I'm turning Japanese
I think I'm turning Japanese
I really think so
Turning Japanese
I think I'm turning Japanese
I really think so


----------



## Santoro (1 September 2007)

Currently I am in the opinion that they will cut rates in September, measures annouced by Bush and the Fed's willingness to ease the liquidity problem looks like everyone is prepared to ensure markets don't suffer more than neccessary.
I think that the Fed would prefer struggling homeowners are able to stay in their homes and keep paying the interest to the banking industry. (them being the source of the bulk of the funds) The cost maybe a few percentage points now. The easing will also allow more credit to be taken by those not quite in trouble yet, if they choose.
What is the alternative, battered investors, broken mortgage holders, real estate prices falling.....not quite as profitable to the Fed and the banking industry.


----------



## Uncle Festivus (1 September 2007)

Ben Bernanke with a US dollar

"I've got your picture, I've got your picture
I'd like a million of you over myself
I asked the doctor to take your picture
So I can look at you from inside as well
You've got me turning up and turning down and turning in and turning 'round" 

Issuing more 'Vapors' by the looks of it


----------



## KIWIKARLOS (1 September 2007)

If they do cut the rate it will bring back some confidence in the market. We have to remember the US GDP was hitting 4% before this mess started to surface. There is no way tha America is heading toward a Japan Style economy. If they were going that way would you be implying interest ratess of 0% The housing market in the US will be cactus for a while and may never have the kind of boom growth we saw in the past but i think it will post small % gains after the market figures out its probs.


----------



## hangseng (1 September 2007)

I don't think rates will be cut in September. The Fed wil wait for the next lot of economic indicators. Bernanke did not mention cutting rates, he said they would do what is necessary for the economy. He is well aware that this move would assist the share market short term and struggling homebuyers but may be economically damaging longer term for the US. 

Also this chap knows what goes on behind the scenes.

Larry Fink http://money.cnn.com August 31 2007: 9:46 AM:
Where do you stand on interest rates? 
"I don't believe the Federal Reserve should ease. It's a foolish, foolish statement for people to make with the economy performing in line with the Fed's current forecast. It's a good thing for regulators to see risk premiums become more appropriate." 
(Fortune Magazine) -- Before he co-founded money-management firm BlackRock, Larry Fink, 54, was an early pioneer of the mortgage-backed-securities market. Now his firm, which went public in 1999 and merged with Merrill Lynch's investment-management business last year, oversees $1.2 trillion in assets -- and has been advising Wall Street clients reeling from the subprime lending meltdown. He spoke with Fortune's Peter Eavis about the ongoing credit crunch.


----------



## sassa (1 September 2007)

Santoro said:


> What is the alternative, battered investors.




Been there,done that.Is it possible to not go there?Do we expect Bernanke in the U.S to provide world wide impetus that will allow markets to operate without financial risk?As I quoted in another thread,"Capitalism without financial risk is not capitalism at all,but a kind of socialism for the rich."(Caroline Baum)


----------



## wayneL (1 September 2007)

KIWIKARLOS said:


> There is no way tha America is heading toward a Japan Style economy. If they were going that way would you be implying interest ratess of 0%



Not necessarily.

We're not talking about an exact duplicate here, but similar characteristics.

No way? Never say never dude!


----------



## numbercruncher (1 September 2007)

> The current members of the Board of Governors are:
> 
> Ben Bernanke, Chairman
> Donald Kohn, Vice-Chairman
> ...





Isnt it a bit coincidental that these guys are all of the same faith/ancestory ? just sort of struck me when i looked up the fed on wikepedia and googled them all.


----------



## Smurf1976 (1 September 2007)

Uncle Festivus said:


> Ben Bernanke with a US dollar
> 
> "I've got your picture, I've got your picture
> I'd like a million of you over myself
> ...



Not just Vapors though, we'll end up in Dire Straits with all this Money For Nothing pretty soon.

It's The Final Countdown, after that The Only Way Is Up (for inflation). 

As for the Fed - Livin' On A Prayer...:


----------



## sassa (1 September 2007)

KIWIKARLOS said:


> If they do cut the rate it will bring back some confidence in the market.



Bringing back confidence to the market and solving a credit crisis are 2 different things.
Enjoyed Sam Pandit's ditty-
Oh well,Berthankyou says Main Street,
Perhaps soon it will be Bertanked you.
The party can't go on forever blowing air into the fire.


----------



## Flying Fish (2 September 2007)

sassa said:


> Bringing back confidence to the market and solving a credit crisis are 2 different things.
> Enjoyed Sam Pandit's ditty-
> Oh well,Berthankyou says Main Street,
> Perhaps soon it will be Bertanked you.
> The party can't go on forever blowing air into the fire.




so I should start putting money in the bank?


----------



## vishalt (2 September 2007)

Sept 18th is the announcement, there is still a truckload of data to come out so I think the Fed is actively considering it.. if the data generally comes out weak I think the Fed will cut it - the US economy's health is top priority. 

but if wages/production/spending all increase etc then I think they'll hold on "concerns about inflation" which never seems to stop from the FOMC


----------



## Flying Fish (2 September 2007)

vishalt said:


> Sept 18th is the announcement, there is still a truckload of data to come out so I think the Fed is actively considering it.. if the data generally comes out weak I think the Fed will cut it - the US economy's health is top priority.
> 
> but if wages/production/spending all increase etc then I think they'll hold on "concerns about inflation" which never seems to stop from the FOMC




What is FOMC?


----------



## Shane Baker (2 September 2007)

http://www.federalreserve.gov/FOMC/


----------



## wayneL (2 September 2007)

Flying Fish said:


> What is FOMC?



*F*ederal *O*pen *M*arket *C*ommitee


----------



## Santoro (19 September 2007)

sassa said:


> Been there,done that.Is it possible to not go there?Do we expect Bernanke in the U.S to provide world wide impetus that will allow markets to operate without financial risk?As I quoted in another thread,"Capitalism without financial risk is not capitalism at all,but a kind of socialism for the rich."(Caroline Baum)




Well guess the fed do want to maximise there return by making sure we keep borrowing or by ensuring people stay to make their payments. The stood to lose way too much, banking is banking.

Fools, us or them?


----------



## krisbarry (19 September 2007)

Smurf1976 said:


> Not just Vapors though, we'll end up in Dire Straits with all this Money For Nothing pretty soon.
> 
> It's The Final Countdown, after that The Only Way Is Up (for inflation).
> 
> As for the Fed - Livin' On A Prayer...:




lol, that is so 1984:


----------



## >Apocalypto< (19 September 2007)

Stop_the_clock said:


> lol, that is so 1984:




STC,

you are so September 19th 1987 :


----------



## sassa (27 September 2007)

vishalt said:


> Sept 18th is the announcement, there is still a truckload of data to come out so I think the Fed is actively considering it.. if the data generally comes out weak I think the Fed will cut it - the US economy's health is top priority.
> 
> but if wages/production/spending all increase etc then I think they'll hold on "concerns about inflation" which never seems to stop from the FOMC




And now I understand about rate cuts,injection of liquidity and the investors response to these.A great article

http://hussmanfunds.com/wmc/wmc070924.htm


----------



## Kauri (7 November 2007)

They are talking down the next possible cut...
Cheers
........Kauri



> Nov. 6. Fed"s Plosser is being quoted in the NY Times this afternoon, stating that he is against rate cuts unless the economy slows below forecast. He also adds that he sees Q4 GDP slowing to 1.0-1.5% and thinks that last week"s rate cut was a close call. US bonds followed the stock markets and rumors today, with the bond yields hitting highs this morning around 4.375% on the ten years, before falling to 4.31% on rumors of more investment bank losses and in reaction to a slide in stocks. But more denials of losses and a strong 100 pt surge in the DJIA into the close lifted yields back to the morning highs.
> USD/JPY is at 114.73, underpinned by the recovery in stocks and fresh highs in the dollar bloc carry trades. Plosser's comments add to the view that despite current volatility in the markets, the Fed will not move to cut rates in December,


----------

