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Re: What will the FED Do Next?
Old 08-01-2006, 07:54 AM   #21
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Re: What will the FED Do Next?

Quote:
Originally Posted by Mwsinron
I guess. However it smacks around that theory of oh noes the consumer isnt spending anymore* At least they have the money to do it with.
Savings rate was -1.5%. Annualized the "consumer" is spending 18% more then they are making.

Can I say the "S" word? Stagflation.
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Re: What will the FED Do Next?
Old 08-01-2006, 07:58 AM   #22
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Re: What will the FED Do Next?

Quote:
Originally Posted by IHateCNBC
Savings rate was -1.5%.* Annualized the "consumer" is spending 18% more then they are making.

Can I say the "S" word?* Stagflation.* *
Don't worry me none. Inflation indexed bonds, real estate, hard asset producers and owners, commodities, non-US bonds...
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Re: What will the FED Do Next?
Old 08-01-2006, 08:24 AM   #23
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Re: What will the FED Do Next?

For fun we should have a poll on our speculation as to what they will do next week. See how us amateurs do compared to the pros like Brewer.... I am still for a +.25% and open language for the next meeting.

SWR
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Re: What will the FED Do Next?
Old 08-01-2006, 11:37 PM   #24
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Re: What will the FED Do Next?

Dispite of the somewhat bad reports today I still think the Fed will pause at the next meeting. The last 3 or4 rate increases have not worked fully through the system. Also inflation driven by companies just padding their profits is not such a bad thing.
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Re: What will the FED Do Next?
Old 08-01-2006, 11:52 PM   #25
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Re: What will the FED Do Next?

FWIW, the chance of a pause dropped from 70% to 65% today (according to fed fund futures).
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Re: What will the FED Do Next?
Old 08-02-2006, 01:24 AM   #26
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Re: What will the FED Do Next?

I'm thinking a .25 raise and language that says "we're pausing" in clear terms. Market rallies because, "It's over" and Bernake gets to trade in his dove wings for hawk's.
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Re: What will the FED Do Next?
Old 08-02-2006, 04:00 AM   #27
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Re: What will the FED Do Next?

.25 raise...historically the fed has never stopped raising rates with un-emloyment so low,,corporate profits so high and the markets holding up fairly well so far
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Re: What will the FED Do Next?
Old 08-02-2006, 06:41 AM   #28
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Re: What will the FED Do Next?

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.25 raise...historically the fed has never stopped raising rates with un-emloyment so low,,corporate profits so high and the markets holding up fairly well so far
Not to mention core inflation at an 11 year high, crude at $76 and gold at $650.

If the Fed pauses they will lose all credibility.* *

Hence, I say again - they painted themselves into a box.* *:

This .25 drip drip thing was a bad idea.
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Re: What will the FED Do Next?
Old 08-02-2006, 11:15 AM   #29
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Re: What will the FED Do Next?

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historically the fed has never stopped raising rates with un-emloyment so low,,corporate profits so high and the markets holding up fairly well so far
On the other hand, GDP growth was 2.5%. Historically, the fed has never continued to tighten with 2 consecutive quarters of GDP growth < 3%.

The economy has slowed considerably. Housing has cooled glacially. The fed fears that if they raise again, they'll be setting us up for a hard landing.
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Re: What will the FED Do Next?
Old 08-02-2006, 11:57 AM   #30
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Re: What will the FED Do Next?

I thought they always overcorrected! We will see. I admit my prediction may be tainted by personal desire (my mortgage is fixed, my emigrantdirect account keeps going up and up and up...)
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Re: What will the FED Do Next?
Old 08-02-2006, 11:59 AM   #31
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Re: What will the FED Do Next?

Well frankly Id like to see them back down to 1 percent :P Booming equities makes more money than 6% money markets.
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Re: What will the FED Do Next?
Old 08-02-2006, 12:13 PM   #32
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Re: What will the FED Do Next?

USD index went under 85 today that means crude price goes up and that means our trade deficit goes up.

Fed should go .50%.

IMHO.
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Re: What will the FED Do Next?
Old 08-02-2006, 12:16 PM   #33
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Re: What will the FED Do Next?

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Originally Posted by IHateCNBC
USD index went under 85 today that means crude price goes up and that means our trade deficit goes up.*

Fed should go .50%.*

IMHO.* **
Hindsight being 20/20 last bump should have been .5 %
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Re: What will the FED Do Next?
Old 08-02-2006, 12:18 PM   #34
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Re: What will the FED Do Next?

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Originally Posted by Mwsinron
Hindsight being 20/20 last bump should have been .5 %
Yeah the .25 and 38 fed is done rallies did not work for me either.

What a joke.

Good thing the fed is transparent to the markets. : Just like their charter says.
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Re: What will the FED Do Next?
Old 08-02-2006, 12:45 PM   #35
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Re: What will the FED Do Next?

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Originally Posted by IHateCNBC
USD index went under 85 today that means crude price goes up and that means our trade deficit goes up.*

Fed should go .50%.*

IMHO.* **
I don't imagine the Fed is terribly eager to see China float the yuan. Talk about a recipe for US inflation!

The 1/4 point at a time game is not without its problems, but this is really a case of "pick your poison". I definately did not want to go through a replay of 1994. Just about killed the bond market and blew up a number of financial institutions that got caught with their pants down in the carry trade.
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Re: What will the FED Do Next?
Old 08-02-2006, 02:25 PM   #36
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Re: What will the FED Do Next?

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Originally Posted by brewer12345
I don't imagine the Fed is terribly eager to see China float the yuan.* Talk about a recipe for US inflation!

The 1/4 point at a time game is not without its problems, but this is really a case of "pick your poison".* I definately did not want to go through a replay of 1994.* Just about killed the bond market and blew up a number of financial institutions that got caught with their pants down in the carry trade.
We may have a replay of 1987.* *

Yield curve is horrible a massive 10 year and 30 year treasury auction next week that will not go well.

Heck my money market yields more then a 30 year treasury right now.

Not the sign of a health economy.* *
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Re: What will the FED Do Next?
Old 08-02-2006, 02:48 PM   #37
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Re: What will the FED Do Next?

Don't forget that there is a lot of tightening that hasn't made an impact yet. It takes 6 to 18 months for the full effect of a rate increase to be felt...
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Re: What will the FED Do Next?
Old 08-02-2006, 03:19 PM   #38
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Re: What will the FED Do Next?

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Don't forget that there is a lot of tightening that hasn't made an impact yet.* It takes 6 to 18 months for the full effect of a rate increase to be felt...
Money poured into the municiple bond funds today. Normally the sign right before a big down turn in stocks.

20 year AAA dropped 20 basis points in yield. Wow.

2 year AAA dropped 10 basis points.

We shall see.
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Re: What will the FED Do Next?
Old 08-03-2006, 07:00 AM   #39
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Re: What will the FED Do Next?

Australia raised rates two days ago and ECB raises last night.

Meaning. Fed needs to raise rates to be competitive to help the Treasury sell debt products.

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Re: What will the FED Do Next?
Old 08-04-2006, 04:25 PM   #40
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Re: What will the FED Do Next?

Low job numbers today might mean a pause. Of course personal income was up a bit. Maybe they will crank another .25 to let everyone know whos boss
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