It's very rare for the Fed to use such strong language like this prior to a meeting. Based on what Bernanke has to say, I'm going to anticipate a 1/2% rate cut at the next meeting in just less than 3 weeks. Here's the article:
http://www.msnbc.msn.com/id/22592939/
In it, he says, "We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks."
The article discusses the possibility of a half percent cut, but also the chance that they'll play it conservative with a quarter point cut. Given the measured language that they've used in the past though, I doubt they'd play it conservative at this point. The reason is, if they raise expectations by promising "substantive additional action" and only deliver a modest quarter-point cut, they run a serious risk of disappointing the market. Whenever someone, or a company, delivers less-than-expected results, there is a negative effect on the market. I doubt the Fed would purposely raise expectations only to fail to deliver on them. The Fed knows that every word they issue is heavily analyzed by market experts in order to glean every last possible drop of information from it, and oftentimes, they have to play their hand very close in order not to undermine whatever goal they're pursuing. This is why I don't believe this statement is a fluke or slip up, I think they really intend to deliver.
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