Am I the only one (besides UncleHoney?) to feel that the Feds are moving into dangerous new territory with today's .75% rate cut? Are things really so bad that we need to make record low interest rates even lower, just because the stock market has dropped 10%? It smacks of several things:
It just seems a little too much like popping a pill or taking steroids to keep the good times rolling forever. I like rising stocks as much as the next person, but I accept that markets don't always go up, and actually take some comfort knowing that excesses are being wrung out of the system. Am I just becoming totally old-fashioned to think the Feds should just chill and let things work themselves through?
a) Administration wants to make sure stocks go up in an election year
b) We've become so used to rising equity markets that if the market goes down 10% we expect 'the government" to do something to fix it.
c) the longer we use these sorts of techniques to keep our over-extended economy going, the worse things will be when they finally do adjust.
d) this is the response appropriate to a financial system on the verge of locking up, not just one where stocks have fallen 10% -- are things worse than we think?
Meanwhile, the lower interest rates make the dollar weaker.b) We've become so used to rising equity markets that if the market goes down 10% we expect 'the government" to do something to fix it.
c) the longer we use these sorts of techniques to keep our over-extended economy going, the worse things will be when they finally do adjust.
d) this is the response appropriate to a financial system on the verge of locking up, not just one where stocks have fallen 10% -- are things worse than we think?
It just seems a little too much like popping a pill or taking steroids to keep the good times rolling forever. I like rising stocks as much as the next person, but I accept that markets don't always go up, and actually take some comfort knowing that excesses are being wrung out of the system. Am I just becoming totally old-fashioned to think the Feds should just chill and let things work themselves through?