Rate cut rumours
- Thread starter FGBS
- Start date
When are they meeting?
Heard about Bernanke renting helicopter...
I'm buying stocks in a paper company. Anybody know who makes the paper Ben will need to print the zillions of dollars on to get out of this mess?
anyone actually read the statement.
i know i did not.
i just assumed same as everyone else.
but according to this statement the rate cut is only temporary and can be taken back.
on previous rate cuts the word temporary was not present in the statement.
i checked and this is the case.
it is only present in this statement.
also as they did not cut the fed funds rate the market may have got this one wrong.
so there is the possibility as that the discount rate cut might be taken back.
here below is the statement.
To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee's target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks' usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower. These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York and San Francisco.
http://www.federalreserve.gov/boarddocs/press/monetary/2007/200708172/default.htm
i know i did not.
i just assumed same as everyone else.
but according to this statement the rate cut is only temporary and can be taken back.
on previous rate cuts the word temporary was not present in the statement.
i checked and this is the case.
it is only present in this statement.
also as they did not cut the fed funds rate the market may have got this one wrong.
so there is the possibility as that the discount rate cut might be taken back.
here below is the statement.
To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee's target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks' usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower. These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York and San Francisco.
http://www.federalreserve.gov/boarddocs/press/monetary/2007/200708172/default.htm
I haven't heard the rumor but thy have no choice now. Credit crunch is bad....only thing is what does a rate cut do if nobody wants to hold MBSs?
China just increased the rate.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ar8uC9E7ui_E&refer=home
China Raises Rates for a Fourth Time This Year to Cool Economy
By Nipa Piboontanasawat
Aug. 21 (Bloomberg) -- China raised interest rates for a fourth time this year to cool the world's fastest-growing major economy after inflation and money supply surged.
The benchmark one-year lending rate will increase to 7.02 percent from 6.84 percent, starting tomorrow, the People's Bank of China said today on its Web site. The one-year deposit rate will rise to 3.6 percent from 3.33 percent
http://www.bloomberg.com/apps/news?pid=20601087&sid=ar8uC9E7ui_E&refer=home
China Raises Rates for a Fourth Time This Year to Cool Economy
By Nipa Piboontanasawat
Aug. 21 (Bloomberg) -- China raised interest rates for a fourth time this year to cool the world's fastest-growing major economy after inflation and money supply surged.
The benchmark one-year lending rate will increase to 7.02 percent from 6.84 percent, starting tomorrow, the People's Bank of China said today on its Web site. The one-year deposit rate will rise to 3.6 percent from 3.33 percent