What If The Fed Doesn't Cut?

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"The market wants it. Blowhard commentators are clamoring for it. And the various prognosticators that trade futures contracts see the Federal Reserve dropping the funds rate prior to its meeting in four weeks," writes Market Beat's David Gaffen. But what if the Fed doesn't cut?
Gaffen gives five reasons the Fed might not cut.
We'll do him one better. This morning we spoke to a former Fed staffer, an economist who is familiar with the thinking inside the money changers' temple, who believes the Fed won't cut in September.
"All the pressure to cut is a counter-indicator," the economist said. "The folks with the votes don't like to appear pressured by the market to cut. From the Fed's point of view, inflation is still the real risk. The credit market is correcting for risk just fine. There's no need for a cut now."
Update: Almost every economist agrees with our source!
Five Reasons: Why the Fed Won’t Cut Rates [Wall Street Journal]

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