If rumors were dollars, we’d be the most liquid team on Wall Street today. The latest rumor we’ve heard, from a credible source at a large investment bank, is that the Federal Reserve may make an emergency rate cut before the weekend. He admits that this is only a credit trading desk talk for now and if anything he himself is a source unfamiliar with the thinking at the Federal Reserve.
The argument for an emergency rate cut begins with the spike of the dollar, which many believe may be a sign that banks and financial firms are scooping up dollars to make up for lost capital cushion due to events such as the Fannie and Freddie bailout. As this rapid movement in currency places further stress on the global financial system it also creates space for a further Fed easing. The Fed may feel that an emergency cut could ease pressure on the stocks of several financial firms and banks that have come under fire today.
As we said, this is still just something that people are talking about at banks and we haven’t had any indication from anyone close to the Fed on this. But be assured that it was talked about on credit markets calls this morning.
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Is it me?
That would be an asinine move by the Fed and would solve nothing. So maybe they will do it.
If you listen closely, you can hear the printing presses.
Carney, this is not a new rumor… The rumored timing of the cut might be new.
If it happens the stock market will dive further (IMO). The rate cut gimmick has ran its course.
A cut will do absolutely nothing except send the dollar back into the toilet.
We already have enough Euro’s in NYC over for cheap shopping. My brain can’t handle anymore socks and sandals
what number am I?
High probability the FED will default on all treasuries.
Nah, don’t believe in default
needs more lehman
what mayo am I?
Pizza needs to merge with Imodium AD in order to survive in my stomach.
the dollar falls on news that Europe is weakening. gee, I guess we aren’t. the dollar belongs in the toilet, along with the gov’s statistical manipulation. Positive GDP figures my ass.
the only liquidity you’ll have is 80-90 proof. now yer just making s”$% up!
tell me something – how has bennie’s rate cuts spate “helped” the market recover?
-precisely
so yes, i agree with #4 and #5
@ 11
As I choke down a cajun chicken (i think?) sandwich – which almost ended up splattered all over my monitor as I read your comment – I couldn’t, obviously, help but agree
That will just prolong the problem. Honestly, how is wall street this stupid. You can beat the market because the market is dumb. Read Seth Klarman’s book. You can’t ignore Risk.
@14, are you insinuating that we’d be in the same bucket we are now -or better- if rates had never been cut the past year or so? id imagine Bear, Lehman and a dozen other banks would have been underground a lot sooner otherwise.
If rapid asset inflation and loose monetary policy were the road to prosperity, Argentina would be the richest country in the world right now!!
I heard this today also. Seems unlikely, but with the dollar near recent highs, there may be less harm in doing so.
How on earth is an extra 25 or 50 basis points going to help anything?
I’m guessing it isn’t.