Yesterday, I became convinced that the Fed would only cut interest rates by a quarter point. My thought was that the Fed would want to send a message that they don’t ease on demand. Markets were already pricing in a half-point cut, which was well in excess of any public statements by Fed officials. At the same time, the economy is clearly in considerable danger of slowing down, so the Fed wouldn’t want to stand pat. That left a quarter point as the only option. If I had managed to post any of this yesterday I would now look like a genius today.
December 12, 2007 at 9:17 am |
To achieve genious status you would have had to establish a short position before the quarter point announcement and then close out the position before the today’s new Federal Reserve announcement. The Dow is up 177 points as of 10:10AM (from Yahoo). True genious may be settling for average – a broadly diversified set of index funds or ETFs.
January 22, 2008 at 11:23 pm |
[...] Three-Quarter Point Rate Cut The big news today, obviously, is the Fed’s eye-popping 75 basis point rate cut. I wonder if they had the last FOMC to do all over again, they wish they had cut a half point when they had the chance. [...]