Philly Fed Chief Warns That Inflation Is Too High: Rate Hikes Needed

Quote from duard:




Registered: Jan 2005
Posts: 1190


02-21-07 03:28 PM

The cracks in the pavement are starting to show. Eventually a correction will come when an event ---like the BOJ pulling liquidity out or.....

Then the opposite: good news will be bad news and the markets will sell-off on all news.
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Two weeks ago I wrote that and look how quickly things can and do change...
 
Quote from Covertibility:

US RATE FUTURES-Timing of possible Fed cut inches closer

"... chances of a June rate cut rose as high as 24 percent from 14 percent overnight and zero early this week. Chances of a cut in the third quarter traded as high as 88 percent before retreating to 76 percent."

"Also on Friday January's core producer prices, stripped of food and energy, rose by 0.2 percent, as expected, pulling the year-on-year rate to 1.8 percent. "

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More rate hikes...lol... plenty of room to cut with no inflation out there unless ya live in the cave with guns, bottled water and gold bars. Still on my wall from another thread : Treasuries to Climb Most in Five Years, Survey Shows -- consesus points to down year in rates on back of slower economy led by housing.
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88% percent chance to cut in Q3 was right (they should've cut in June but the Fed is reactive not proactive). Those rates from that survey along with the "consesus points to down year in rates on back of slower economy led by housing" are coming to fruition. Although I do have to say that one post concerning rates going much much higher that even a 4 year old can see the trend was a good laugh.

Now we get to see whose plan will be used to bailout the housing market in Cali/Florida/Nevada/Arizona - Congress or El Presidente. The bigger the bailout the fewer rate cuts will be needed.
 
We still have aleast a year untill all the effects of sub prime lending issue come to the surface. This rate cut should be enough for the interm. BTW USD/CAD is @ 1.141 going lower.

Akuma
 
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