On Nov 9, 2007, at 5:05 PM, raghu wrote:
After the Fed's 50 bp rate cut in Sept, BusinessWeek ran an article with the memorable title "Fed: Wall Street's bitch." That perception has only strengthened since then and now the markets are pricing in a near 100% probability of another cut before year-end.
Not exactly. The markets were very disappointed with Bernanke's testimony yesterday because he made it sound as if another rate cut is not imminent. Should things really unwind, they'll undoubtedly change their mind, but the message they're sending now is no rate cuts unless the econ data look really bad. Maybe that headline had something to do with the hard line. The Fed's slowness to ease runs counter to the more apocalyptic reading of the U.S. economy's prospects. Doug
