Fed Open to Rate Cuts, but Still Worried About Inflation

[Lone_Star_Dem]

Source: Washington Post

Economic Reports Raise Specter of Stagflation

Federal Reserve Chairman Ben S. Bernanke signaled openness to further interest rate cuts today, though he also indicated that the risk of higher-than-expected inflation has increased in recent weeks and that the central bank will be watching that trend carefull

Fed policymakers, Bernanke told the House Financial Services Committee today, "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risk."

Underscoring those risks, the Commerce Department said today that orders for big-ticket durable goods fell 5.3 percent in January, more than expected. Sales of new homes fell 2.8 percent, also more than expected.

Further evidence of the trouble: Mortgage giant Fannie Mae reported today that it had lost $3.55 billion in the last three months of 2007, as mortgage defaults and other problems rippled through the housing market; and prominent homebuilder Toll Brothers said that it had lost $96 million in the first three months of its current fiscal year, a result that chief executive Robert Toll blamed at least partly on "ceaseless talk of a recession."



Read more: http://www.washingtonpost.com/wp-dyn/content/article/2008/02/27/AR2008022700967.html?nav=rss_email/components

[MercutioATC]

1. The Fed is doing wonders for precious metals...

Silver is over $19.20/oz for the first time in over 25 years...

[DJ13]

2. The rate cuts are only adding to our problems

The finance industry isnt passing on lower rates to consumers, the cuts are just adding to the spread between the cost of borrowing money for the banks and the rates the consumer pays so it increases the profit margins of the banks.

Then theres the increased costs the consumer pays for the majority of goods in the marketplace that are imported and subject to currency devaluations.

These rate cuts are screwing the consumers twice over.

[neverforget]

3. The Fed doesn't give a damn about inflation only Wall Street. If they did

care about inflation, then they wouldn't cut interest rates.

[Javaman]

4. Exactly right. if he cared about the middle and poor classes he wouldn't cut rates.

if he cares about wall street and the rich he cuts rates. Hmmm, what has happened recently?

I'm buying some gold this week.