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Looking for surprise rate cut? Be careful wha t you wish for

Categorie: Funds
Submitted 10 months ago by

Mittar_b , Project Manager at Softprodigy

There have been some rumors floating around about the Fed possibly making an emergency rate cut in the next month in order to "save" the market. If you are one of those people who think that this would be a good idea, remember the old saying: be careful what you wish for, because you may just get it. With the way the market has been acting lately, it would be easy to look to the Fed to come in early to bail us out with an emergency rate cut, but if this actually did take place I think the reaction would be the opposite of what people would expect. The impression it would send to the markets would be that we are in a panic situation and that things are in extremely bad shape. I just don't think that is the message that the Fed wants to put out at this time. Right now, it looks li... More...

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#1 | Vtcastle @ 10 months ago User Rank : 532 Portfoilo Balance: $12,365.00 Comment Rating: 0 Flag Comment Spam | Miscategorized | Prohibited: I think we will get a 1/2 point cut in the next session, and 1/4 point cuts for at least 1-2 sessions afterwards. I don't want to speculate further out than 2-3 months due to the volatile markets. The election alone is enough of a problem as is.

I don't think the market would panic after an emergency rate cut. However, I doubt that this will occur b/c Bernanke has a tendency of letting the market price in his future actions.

I also think oil will settle in the low $90s / barrel for the remainder of the 1st quarter if nothing drastic happens. I think once Brazil ramps up production on its massive new oil fields, that oil will actually drop in price.

I like the contrarian viewpoint you created. Ideas like this allow investors/traders to reinforce their convictions. Nice work!

VT

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