Unlike what I have been pleading for over the past 6 months, the rumor is that the Fed will meet tomorrow (9/16) and possibly slash the rate.
What’s this mean if the rate gets slashed 25 or 50 basis points? The dollar will tank, oil will trade well above $120 a barrel, and inflation will skyrocket once again after easing over the last few months.
This proposed cut could end up being the worst thing the bush administration (they “hired” bernanke) has done to date. Yes, even worse than the Iraq war. Holy shiat!
This article hinting at an interest rate slash is from 9/11/08:
“At the same time, oil prices have fallen sharply from their record highs and the dollar has rebounded against the euro. Thus, some think the threat of inflation is receding.”
So, let me get this right – Inflation gradually moved to an unbearable level over 12+ months. Because the Fed hinted at a rate increase in mid July, oil has fallen over the past month or two as inflation eased. 12+ months of inflation growth vs. 2 months of inflation ease = inflation is no longer an issue so let’s slash the rate. Wow.
This article hinting at an interest rate slash is from today: