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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ThirdEye who wrote (7445)	2/9/2004 12:16:15 PM
From: mishedlo	Respond to of 110194

Mish, you might well be right about a rate cut. But considering the recent change in language about the Fed bias, the lackluster job market, the claim to have beaten deflation, etc. don't you think a flip like that could potentially be more disruptive to the market than a small hike? It would be an admission that they have been wrong about a few things and that the "recovery" is alot more fragile than their jawboning would have us believe. The rate cut I am looking for is in Europe and Canada, not really the US, although under the right circumstances the US could cut too. The right circumstances for the US would be jobs and housing falling off a cliff. Far more likely that the recovery just stalls, both here and in Europe and the US$ falls too. That combination will force Europe to cut IMO. Once Europe cuts, the US might want to cut to remain competitive. ggg A flat out cut right here in the US is not likely, not now. If conditions worsen, and I expect them to, look for a bias change back to "fear of disinflation" from neutral. That will be the signal but we need to see how the economy does over the next couple months. Mish