Monday, January 21, 2008

50 now and hints at Intermeeting Cut

I'll put up a more definitive rate preference and statement later, but right now I lean towards:

1) Cutting 50 bps on the 30th

2) Saying something like "The Committee is monitoring the data closely and is prepared to act promptly to increasing signs of deterioration in growth and employment"

A growing risk is now generalized, rather than simply asset, deflation. It is quite a difficult time for central bankers, when both inflation and deflation are credible risks.

This makes language crucial in communicating to the markets. In particular, participants need to know what the key data measures are so they can update their expectations. In particular I would point the markets towards unemployment and agricultural prices. Although these may not be leading indicators they are quite solid indicators of where the pressures are and we can feel more confident in taking large actions based upon them.

In particular if Ag prices fall I don't see how general inflation holds up in this environment. Not that Ag prices are pushing general inflation but they indicate a worldwide slowdown in demand growth.

5 comments:

Anonymous said...

Given the big drop in the TSX, Europe and Asia, are we more likely to see an intermeeting cut? And will it do any good at this point?

Anonymous said...

get google ads free -
get paid to draw -
get this off my chest now -
governmentregistry -
government registry -
heartburn no more -
homemadeenergy -
home made energy -
honest riches -
learn photoshop now -
linden method -
malware removal bot -
marketing on the fringe -
maternityacupressure -
maternity acupressure -
meet your sweet -
musclegainingsecrets -
muscle gaining secrets -
my online income system -
negative calorie diet -
no adware -
one minute cure -
one week marketing -
online pickup secrets -
partenon -
pc on point -
perfect optimizer -
perfect uninstaller -
pick the gender of your baby -
power cash secret -
profit lance -
publicrecordspro -
public records pro -
push button marketer -

Anonymous said...

warp speed fat loss -
wedding speech 4u -
windo fix -
your bill killer -
you will get paid -
zygor guides -
20 day persuasion -
advanced pc tweaker -
adware bot -
affiliate naire -
apple patch diet -
article submitter -
art of approaching -
burnthefat -
burn the fat -
carb rotation diet -
cold sore freedom in 3 days -
conversationalhypnosis -
conversational hypnosis -
copy that game -
cure for bruxism -
cure hemorrhoids -
cyber link pro -
dl guard -
driver checker -
driver robot -
drop shipping wholesalers -
earth4energy -
earth 4 energy -
easy backup wizard -
easy click mate -
easy photo biz -
eatstopeat -
eat stop eat -

Anonymous said...

musclegainingsecrets -
muscle gaining secrets -
muscle gain truth -
my traffic strategy -
nasty dirty money -
negative calorie diet -
no adware -
pc optimizer pro -
perfect uninstaller -
pergola plans -
pick the gender of your bady -
plr ebook club -
pregnancy without pounds -
profit lance -
publicrecordspro -
public records pro -
questions for couples -
quit smoking today -
ready made review sites -
reg genie -
registry easy -
registry easy download -
registry winner -
registry winner download -
retrievea lover -
reverse mobile -
richard mackenzie direct -
rocket italian -
rocket spanish -
roulette sniper -
rss ground -
secret affiliate weapon -
secrets book -
spam bully -

Anonymous said...

wrap candy -
xsite pro -
zygor guides -
37 days to clean credit -
advanced defrag -
adware alert -
adware bot -
affiliate prophet -
affiliate video brander -
anti spyware -
art of approaching -
atomic blogging -
auction classified cash -
automated cash formula -
bbq book -
bloggers pay check -
blogging in action -
body building revealed -
burnthefat -
burn the fat -
carb rotation diet -
cheat your way thin -
chopper tattoo -
cleanup the profits -
cold sore freedom in 3 days -
commission blueprint -
conversationalhypnosis -
conversational hypnosis -
cure for bruxism -
declutter fast -
driver checker -
earth4energy -
earth 4 energy -
easy member pro -