I already did..
The reasoning for a strong monetary position is due to a concern for inflation (the largest reason). Have we seen any inflation going back 3 months, 6 months, 18 months? The Fed raised int rates last year to the degree that what they have done this year only removed all the raises they did last round, so the net effect is nothing since the raises were completely unnecessary.
A easing monetary policy would be problematic in an inflationary environment, where is that enviroment? We weathered high energy prices without a noticable effect on CPI/PPI etc, and with a slow down in spending will even lower prices since prices are a function of supply and demand, right?
I think that an easing policy is not the fix for the world concerns, but being proactive has an unnoticable effect on how other countries perceive our market and how we are concerned about THEIR concerns, so even if we arent getting hit as much as they are, we are acting on concerns that are outside our own.
I dont think lowering the funds rates down to 3% is going to bring an onslaught of inflation, in fact it may provide a temporary spur in consumer demand that might make the difference of an extended (or very dramatic short term) recession, or a calm natural economic cyclical move where we ease out of the problems and things arent so violent.
My view is that the economy we are in now calls for immediate action, information flows instantly and it is no longer an economy that takes 18 months to cycle from a peak to a trough. So if we ease down to 3% and it seems to bring on inflation, dont you think that Alan the Hawk would pull the strings the INSTANT there was a HINT of inflation? Of course he would, he is such a freaking hawk it is pathetic.
I say do somthing proactive for once, take measures rather than wait it out and ignore obvious signs of both foreign and domestic weakness. These cuts havent even had an effect on demand, not that I have seen..
Your thoughts? |
