Tuesday, Mar 18, 2008
Fed cuts rates by 3/4%
FT: Fed cuts rates by 75 basis points
The Federal Reserve on Tuesday cut interest rates by 75 basis points - slightly less than the 100 basis points many in the market had been expecting. The smaller move reflects the Fed’s continuing concern about inflation, and its fear that too large a cut might trigger an adverse reaction from the bond market.
Posted by jack c @ 06:24 PM (1102 views) Add Comment
14 Comments
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1. paul said...
EVEN MOOOOOOORRREEE! JUST KEEEEP PRINTING MONEEEEEEEY!
2. hpwatcher said...
Soon there will be nothing left to cut
3. geed said...
I predict a huge rise in demand for paper and ink ;-)
4. techieman said...
geed ...and shares? Well at the moment the bears have been squeezed and the RSI divergences look to have predicted a bottom - but tomorrow it could be all change again! I bought some Calls when the Dow went +120 (it went down after the cut) - its now + 386 with Gold down about $30. I need to lie down! :-).
5. tyrellcorporation said...
Interesting they didn't go for 1%. I reckon they are extremely mindful of the scenario that they have no more cuts in the tank when they hit 0%. After today's inevitable stocks rally, the position of the Dow this time next week will be crucial for the US. I reckon (as has been the case for 6 months now) that another bad news story will slip out before Friday and wipe out today's gains.
I'm shorting RBS so am hoping for a price spike first thing tomorrow morning.
6. techieman said...
ok TC.
7. sold 2 rent 1 said...
tyrellcorporation,
"I reckon they are extremely mindful of the scenario that they have no more cuts in the tank "
Exactly. They need to preserve the ammo for the next big panic.
They need to go to sub 1pc before markets reflate in the long term.
This is the dead cat bounce
8. mark wadsworth said...
HPW, have you never heard of negative interest rates?
9. Fed Up said...
The irony of all this is that the Libor rate went up again today.
10. techieman said...
TC / s2r1 - both correct - they are hoping that they can drip feed the markets so that the Fiscal stimulus comes to the rescue as the Cavalry. Really what else can they do?
11. techieman said...
Mark Real or nominal? - if nominal yes but not in the US - thought (if memory serves) that the Swiss had negative rates to "savers" in the war. i.e. they were paid to stash the cash. For real they must already be there.
12. little professor said...
Fed headquarters:
13. it_is_going_with_a_bang said...
"the central bank believes monetary policy alone will not solve the credit crisis"
Oh really. That's why it is at 2.25% then.
They are going to run out of cuts soon and paper to print dollars on.
14. Vicmac64 said...
The dollar is TOILET PAPER