Thursday, February 14, 2008

Bernanke Preview

I think that rate cut in the future to 2.5 will be helpful to soften the ARM crisis and to rebound our economy.

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The markets are, however, expecting at least one, maybe two, additional rate cuts. The consensus is for a half a point reduction to 2.5 percent at the March meeting.

Economists are divided on whether the Fed boss should signal anything in that area, other than to indicate that policymakers stand ready to act if and when needed.

Jones says Bernanke should “try to disabuse the market of thinking he will cut between meetings, but he could “allude” to the fact that he’s ready to cut again, very likely at the March meeting.

“I don't think he is going to hint that more is in the cards,” counters David Resler, chief economist at Nomura International “No one should conclude the next rate cut either in its magnitude or timing is baked in the cake.”

http://www.cnbc.com/id/23147550

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