Wednesday, Feb 27, 2008
Bernanke "economic conditions have become "distinctly less favourable" and could get worse."
BBC: Bernanke hints at more rate cuts
US Federal Reserve chief Ben Bernanke has hinted that the central bank is prepared to cut interest rates further to help ease recession fears. In his semi-annual report to the US Congress, Mr Bernanke said the Fed would continue to "act in a timely manner as needed to support growth". Analysts said his comments increased the likelihood of another rate cut at the Fed's next meeting on 18 March. US interest rates are currently at 3% after two major reductions in January.
Posted by jack c @ 03:22 PM (1046 views) Add Comment
16 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. An Bearin Bui said...
Yeah, because rate cuts are obviously working so well that it makes sense to cut all the way to 0%...
2. maddison said...
Just remind yourself of how different the US situation is from the UK by looking at that interest rate graph. Thats not to say that the effects of what happens in the US wont effect us!
3. paul said...
In other words: "QUIIIICK! PRINT MORE MONEEEEEEY!"
4. Orwell said...
We want our currency to fall even further.
5. Fed Up said...
Sadly the media will be full of misleading stories again about how 'strong' the pound is, now that the dollar has fallen below 50p
6. tyrellcorporation said...
Question is, where will the next bubble appear as all this cash has to go somewhere? ...or is it just going into a debt black-hole!
7. hpwatcher said...
This guy is such a one trick pony...and a mindless one at that.
8. bystander said...
I know this is a little off-topic, but could someone explain to me why sterling has just dropped against the Euro today. What juicy bit of news regarding the CPI have I missed, or did Merv. or one of his merry men (women) make a statement regarding the increased downside risk to growth outweighing the upside risk of inflation.................or, and this is the one I believe to be true, FX traders have seen the euro jump against the dollar and are pushing through with their chance to collect on their bets to short the pound? Our lives are lied to by politicians, but controlled by suits with no accountability except to themselves and their bonuses. What a lovely world we live in.......rant over.
9. jack c said...
@bystander - more economic data today (qtrly GDP results) shows a weakening UK economy (alongside that of the US) and this has prompted speculation of further interest rate cuts - hence the decline in Sterling.
10. bystander said...
Thanks jack c, couldn't make head nor tail of the decline, but didn't read anything about the latest GDP figures, have you got a link??.......bet CPI is still hovering around that 2.1% mark though:)
11. Planning4acrash said...
BTW, watched that mayan thing to the end. EVERYTHING that guy predicts is nonsense. I like the idea of the calendar, and who can argue that we need ethics today, look at what's happening in banking, and who can argue that we need co-creation, i.e. to work with ecosystems, global warming, people working together to solve these things and resource scarcity, etc. But that's where it ends. All the rest is just the guy playing connect the dots with all the various conspiracy theories out there.
12. planning4acrash said...
BTW, watched that mayan thing to the end. EVERYTHING that guy predicts is nonsense. I like the idea of the calendar, and who can argue that we need ethics today, look at what's happening in banking, and who can argue that we need co-creation, i.e. to work with ecosystems, global warming, people working together to solve these things and resource scarcity, etc. But that's where it ends. All the rest is just the guy playing connect the dots with all the various conspiracy theories out there.
13. jack c said...
@bystander - CPI has probably dropped according to Gordo and his merry men (LOL)
This from todays FT
Growth worries disrupt dollar and sterling
By Neil Dennis in London and Andrew Wood in Hong Kong
Published: February 27 2008 17:33 | Last updated: February 27 2008 17:33
The dollar’s headline-grabbing fall against the euro on Wednesday overshadowed sterling’s further weakness, after data showing growth slowing in the UK prompted speculation about further rate cuts.
Fourth-quarter gross domestic product in the UK rose 0.6 per cent, only fractionally below expectations, but was supported by a rise in government spending, while household spending slowed to just 0.2 per cent.
“For now the Bank of England retains a mildly hawkish stance over the near-term, but, longer-term, we suspect that the weak growth environment will start to damp inflation concerns, prompting the Bank into action,” said James Knightly at ING.
The pound fell 0.8 per cent against the euro to £0.7595, and was down 0.6 per cent against the yen to Y211.95.
Sterling rose against the dollar, however, after US economic data and comments from Federal Reserve policymakers continued to indicate aggressive interest rate cuts.
US durable goods orders were lower than expected in January, while new home sales dropped sharply. Added to Tuesday’s weak housing and consumer confidence numbers, the data painted an increasingly gloomy economic scene.
Meanwhile, Fed chairman Ben Bernanke yesterday said he would not hesitate to act to support US growth.
The pound was up only 0.2 per cent to $1.9902, reflecting the UK’s own faltering growth scenario. But the dollar’s losses were more pronounced elsewhere.
Against the euro, the dollar fell 1 per cent to $1.5119, having hit a record $1.51434. The Swiss franc was up 0.9 per cent to SFr1.0651 after reaching a fresh peak of SFr1.0624, while the yen climbed 0.8 per cent to Y106.42.
Inflation remained the primary concern of Poland’s central bank, prompting it to lift its main interest rate by 25 basis points to 5.5 per cent. The zloty was only 0.1 per cent stronger against the euro at 3.5262 zlotys, but the dollar fell 1 per cent to 2.3344 zlotys.
The New Zealand dollar hit a 26-year high thanks to a weak US dollar, rising commodity prices and some of the highest interest rates in the developed world.
The currency has benefited Japanese funds and carry traders, which can borrow cheaply at home and deposit the cash in high-yielding securities in New Zealand.
Inflation at 3.2 per cent is above the central bank’s target and so interest rates, now at 8.25 per cent, are likely to stay high for some months yet.
The New Zealand dollar traded as high as at $0.8213 – its strongest since January 1982. It later fell back to $0.8166 after a major survey showed business confidence at its lowest for 10 months.
14. d'oh said...
Bystander - www.forexfactory.com has on its front page the economic figures that are going to be released for the coming day that are likely to affect exchange rates. They are updated usually within seconds of release. They also provide the previous figure and the expected figure, together with an explanation of the metric. Very often it is one of these figures that aren't as headline as BOE interest rate changes that have come in more negative than expected that causes the pound to drop. There have been a few of those of late :-)
15. planning4acrash said...
That's a great website d'oh. Look at the German Import Price Index, .8%m/m. Phew, no wonder the Euro is up!!
16. bystander said...
Thank you Jack c and d'oh, it is becoming clearer to me that currencies have a life of their own and are stimulated and aneathetised by so many different factors, beyond the wit of mortal man - no wonder succesful FX is a true art.