Friday, September 14, 2007

Waiting for the FED meeting on Tuesday?

Investors, clients and borrowers in general are looking forward to the FED meeting on Tuesday for a rate cut. The market has priced in a 50bps reduction. Any less and we could see major declines in stock markets. I would think that the FED will cut only 25bps. I think we can gather the overall thinking in these two quotes:
"It's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford." - President Bush
"It is not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions."- Fed Chairman Ben Bernanke

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