G'day all - dear Zeev, you sez " I do not think that Greenspan is going to rush to lower rate..."
I'd agree with that and your reasonings, especially with the strength of the domestic economies only to show minor signs of slowing, and certainly, incidental or by design, Chairman Al probably doesn't want to see any severe inflation in the equity markets, 9K or even 10K! However, the possibility of a rate cut even if the market doesn't break below the 7K barrier is there, if one is to consider 1) the US has to assert the leadership role [afterall, hoping Japan to clean up its act is fast becoming the moral equivalence of "Waiting for Godot."] 2) By lowering the US rate, it may or may not cause greater harm to our neighbor to the north. I mean, Canada can in turn lower its rate [it has raised it to support the loonies.] I guess this is the conspiracy theory of a coordinated rate cut <G>.
Having said that, definitely, some people have already had excessive expectations. I was watching NBR last night. This guy [from Value Line?] claimed that there is a good possibility for the Fed to ease by 50 basis points. To say the least, even if the Fed is to ease, this is simply out of character. 25, maybe.
best, Bosco |
