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Will Anything Change at Next Week's Fed Meeting?

Thursday, March 11, 2010 - 6:41 PM
From Reuters
Lingering U.S. labor market weakness and nagging doubts about the solidity of the economic recovery are expected to keep the Federal Reserve committed to holding borrowing costs very low for a long time at a monetary policy meeting next week.
Hopefully, the inflation hawk Thomas Hoenig will keep pushing for a move toward a rate hike.
1
Ken TuminKen Tumin5,442 posts since
Nov 29, 2009
Rep Points: 123,743
1. Thursday, March 11, 2010 - 11:22 PM
I would like to think the Fed kept rates low until after the Card act so that everyone's existing balances would hopefully be as low as possible. Once the Fed's rate increases the prime rate is sure to increase.
1
AnonymousAnonymous2,281 posts since
May 9, 2010
Rep Points: 3,788
2. Friday, March 12, 2010 - 11:34 AM
Apparently, Obama nominated 3 people for the Federal Reserve. He chose Janet Yellin for Vice Chairman who is head of the San Francisco Fed and is one of their most dovish members. This is very scary because the Fed will be controlled by people who most likely will not raise interest rates to dampen inflationary pressures in the future. Until Volcker was appointed in 1979, the Fed refused to tighten monetary policy even with inflation at 10% or higher. The only difference now is that the Fed is attempting to control the long end of the yield curve by buying government securities. Despite their efforts, I don't think they can keep long term rates down, so we are likely to see a further widening between short and long term rates. We are making the same mistakes as we did in the early 1970's, although I expect the consequences to be more serious given the astronomical government deficits and debt. Their is a bubble forming as a result of all this governmental spending; the only question is when it will burst. Our only hope is that the American people come to their good senses and eleect more responsibe politicians in the next election. If they continue with this current crowd, God help us
1
AnonymousAnonymous2,281 posts since
May 9, 2010
Rep Points: 3,788
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