Let's Predict The Fed's Move Again

Posted by John Carney, Dec 10, 2007, 12:32pm

The Federal Reserve's Open Market Committee meets tomorrow and is widely expected to cut rates. When we polled readers last week, a plurality of 34% predicted a 25 basis point cut. The second favorite was a fifty bip cut, garnering 22 percent of the vote. Close behind, however, were those who predicted no cut: 19%.

Have expectations moved over the last couple of days? Will the continuing story of credit driven write-downs from major financial institutions push the Fed into an even greater cut? Or does the dollar's recovery this morning indicate that the Fed is going to hold the line on interest rates? Cast your vote below.

Incidentally, our polls have a very good record of predicting Fed moves. Later today we'll make it more challenging by asking readers to predict any changes in the discount rate.

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Posted in: Reader Poll

Comments

Posted by E. Cartman, Dec 10, 2007 1:03PM

Funds 25, discount 50

Posted by Ombudsman-at-large, Dec 10, 2007 1:17PM

John:

Last week's poll was not about what the Fed will do, but what we wanted it to do (you asked "Let's tell the Fed what to do.").

These are two distinct sets of responses and do not a shift in expectations make.

As an aside, what are the odds that this Fed Chairman will have the same job in Jan '09? (I think about 0%.) That said, are current policy decisions made with that short of a view? (It appears to me that they are.) What do you think?

Posted by Fed Watcher, Dec 10, 2007 1:41PM

Fed will drop fed funds rate by 50 bp. Bernanke is supposed to spike the markets for the year-end rally. Doesn't matter it will fizzle out really quick in January. What matters is December. Wait a minute, I just saw him boarding his helicopter...

Posted by Marc Shivers, Dec 10, 2007 1:47PM

25bps...

There's a rundown of the vote count at The Talking Fed

Posted by Anonymous, Dec 10, 2007 2:25PM

When Ron Paul is president the Fed will be abolished.

Posted by John Carney, Dec 10, 2007 2:36PM

Actually, ombudsman, the title of the post did indeed seem to imply we were asking what the Fed should do. But that was a playful response the the notion that the Fed is taking orders from Wall Street by responding to it's expectations, blurring the lines between desires and expectations. The actual poll asked what the Fed would do.

Posted by Ken Houghton, Dec 10, 2007 2:46PM

What Ombudsman-at-Large Said. And again we have to add DR cuts in comments, instead of selecting the option.

25/50 or 25/75 (parity) is likely. 0/100 or 25/125 would be a better idea.

Posted by , Dec 10, 2007 2:48PM

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Posted by , Dec 10, 2007 2:49PM

who cares about the discount rate...the banks see that as there own personal noose and have not utilized it. I bet about this time next year they will wish they did.

"we can't use the discount rate as it's seen as a lender of last resort and we are weary of what message that will send"

Oh you must mean that it signifies you are in deep shit and getting deeper.

Pride is a bitch

Posted by , Dec 10, 2007 4:08PM

I'm less concerned with what the public thinks the fed is going to do and more concerned with what the public thinks the FED SHOULD DO: ....

LETS SEE A POLL FOR THAT!!!

I think we need to stop forcing money to be cheap and let the market correct itself. We need reality to set in.

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