Posted on 10/05/2008 8:10:04 AM PDT by TigerLikesRooster
Two Fed officials push back against rate-cut hopes
3 Oct, 2008, 1054 hrs IST, REUTERS
BLOOMINGTON: Two top Federal Reserve officials pushed back against market expectations of a big US interest-rate cut later this month, saying on Thursday that monetary policy was already easy and inflation still a concern.
St. Louis Federal Reserve Bank President James Bullard and Kansas City Fed chief Thomas Hoenig both acknowledged the US economy was likely to face some rough times ahead, but showed clear unease with the idea of lower rates.
"I think lowering interest rates right now, maybe, is not the right response," Bullard told an audience at Indiana University-Bloomington. In a separate appearance in Albuquerque, New Mexico, Hoenig suggested he was thinking more about when the central bank should begin to push borrowing costs higher even though turmoil is still raging in credit markets.
"We need to deal with this crisis, I agree, and it's difficult, but we can't lose sight of what's ahead of us," Hoenig said, adding that an easy monetary policy helped fuel the credit boom that led to the current crisis. "You could leave rates alone or move them up and you still have an accommodative monetary policy," he said.
(Excerpt) Read more at economictimes.indiatimes.com ...
Ping!
The bailout alone will jack up the inflation rate...so I can see the inflationary concerns of these Fed men if the interest rate is lowered
I am very worried about inflation. This doesn’t really seem like the time for a rate cut.
At least we still have a few people with their heads screwed on right....
Too bad he wasn't equally concerned when the yield curve was inverted because interest rates were too high. The Fed needs to stop treating economic growth like it's the enemy.
And other people need to stop treating it as a "golden idol" the pray to.
The middle of the country didn't have a real estate mania and has a lot of farmers getting high commodity prices. Thus these two Fed branches are less in need of rate cuts in their regions
The American people are the most generous people on earth. When the economy and Wall Street do well, charitable giving goes up in kind.
Why don’t you tell me how it is in Cuba or North Korea where there is nothing like Wall Street?
We should, it fits.
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