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Posted by warren mosler (208.49.176.241) on 07:42:02 10/24/07
Tomorrow's claims last big number before Fed meeting.
Since the last meeting:
Libor/fed funds narrowing
credit trading volumes up at new spreads
employment revised higher
q3 gdp revised up to 3% on exports
q4 projected higher at 1.5%
dollar weaker- should help q4 more
inflation, oil, food, owner equiv rent higher
world growth continues
bank losses minimal- less than 1/2 a quarter's earnings
bank lending way up as non bank lending gets redirected into the banking system
stocks up about 10% for year
mtg apps below stable and purchase apps up 8.8% year over year
Is anything worse than perceived just before the Sep 18 meeting?
They cut 50 to get it all done at once to get markets trading again,
stating to us they won't make the mistake of 98/99 and wait too long
to take it back.
Reason says they don't cut ff next week if data remains tame, but
there is no way to gauge their insecurity about keeping markets
functioning. Not cutting would be a bit of a shock that they don't
want to risk this time.
And we will learn how important inflation actually is to them. They
know the next cpi print will probably put year over year cpi well over
3% which could make headlines and alter their all important
'expectations.'
Warren
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