March Fed Funds Rate: 2.50%, Thanks Bernanke

MrDODGE · Feb 27, 2008

Well it is almost assured at this point from what Bernanke is saying. The Fed doesn't care about inflation. They are all about supporting growth and getting us out of the credit crisis.

S2007S · Feb 27, 2008

The credit crisis that they created years ago, by lowering the rates to historical lows, is what they are now fighting, putting any threat of inflation aside. They WILL DO ANYTHING to get this economy up again....even if it takes them to cut rates back to 1% they will do it, however inflation is going to run out of control....

hoodooman · Feb 27, 2008

And the real inflation numbers won't see the light of day. I'm retired and they are robbing me blind.

TGregg · Feb 27, 2008

This is why the fed stopped reporting M3 - it'd take a mountain of paper just to chart it.

Landis82 · Feb 27, 2008

Quote from S2007S:

The credit crisis that they created years ago, by lowering the rates to historical lows, is what they are now fighting, putting any threat of inflation aside. They WILL DO ANYTHING to get this economy up again....even if it takes them to cut rates back to 1% they will do it, however inflation is going to run out of control....

Given the MAGNITUDE of the crisis in the banking system right now with the money-center banks, I would say that no one really gives a damn about inflation.

In fact, why would anyone care about inflation if GDP was running into the negatives for several quarters in a row because the Fed is "pushing on a string" and the Economy rolls over hard?

If the banking system is as "frozen" as the FED is now finally realizing ( they were pretty slow to this fact until mid-January ), then there are a lot BIGGER issues at hand here than inflation.

Remember, the Port Authority of NY had to pay 20% a couple of weeks ago in order to finance $100 million of short term debt because the banks "backed-away" during the auction of these securities.

Unemployment, Bankruptcy, and massive state, local, and federal deficits due to lack of tax revenue from a sinking economy are just a few of the things that come to mind.

Yet, there is a fairly large group of posters on ET that keep clamoring for the FED to save the dollar by raising rates, reserver requirements, etc., so that the FED can engineer a correction in commodities . . .

Go figure.

poyayan · Feb 27, 2008

Bond is the only thing left to break.

sprstpd · Feb 27, 2008

Quote from Landis82:

Given the MAGNITUDE of the crisis in the banking system right now with the money-center banks, I would say that no one really gives a damn about inflation.

Inflation eats away at everything. It won't matter if new jobs are created if everyone is being paid in toilet paper.

makloda · Feb 27, 2008

Quote from sprstpd:
Inflation eats away at everything. It won't matter if new jobs are created if everyone is being paid in toilet paper.

Ask the Japanese how they feel about low inflation after the post 1990 debt fallout. Their central bank and policy makers were way too slow to react, causing a decade plus of deflation. In the process, they had to cut to 0% and their currency became toilet paper, too.

Landis82 · Feb 27, 2008

Quote from makloda:

Ask the Japanese how they feel about low inflation after the post 1990 debt fallout. Their central bank and policy makers were way too slow to react, causing a decade plus of deflation. In the process, they had to cut to 0% and their currency became toilet paper, too.

Excellent post!

thecalip · Feb 27, 2008

Quote from Landis82:

Given the MAGNITUDE of the crisis in the banking system right now with the money-center banks, I would say that no one really gives a damn about inflation.

In fact, why would anyone care about inflation if GDP was running into the negatives for several quarters in a row because the Fed is "pushing on a string" and the Economy rolls over hard?

If the banking system is as "frozen" as the FED is now finally realizing ( they were pretty slow to this fact until mid-January ), then there are a lot BIGGER issues at hand here than inflation.

Remember, the Port Authority of NY had to pay 20% a couple of weeks ago in order to finance $100 million of short term debt because the banks "backed-away" during the auction of these securities.

Unemployment, Bankruptcy, and massive state, local, and federal deficits due to lack of tax revenue from a sinking economy are just a few of the things that come to mind.

Yet, there is a fairly large group of posters on ET that keep clamoring for the FED to save the dollar by raising rates, reserver requirements, etc., so that the FED can engineer a correction in commodities . . .

Go figure.

I bet every care about inflation. If inflation keep getting ignore, the middle class will get rip out, and country go into chaos. Milk is almost $5 a gallon. I remembered just about same time last time, it was like 3.79. A 25% increase and you said no one care? I know my salary didn't increase 25% over last year.