2007-09-14

Bernanke's box

Interesting article:
Bernanke's box by Mike Larson
http://interestrateroundup.blogspot.com/2007/09/bernankes-box.html

My take is that the Fed will go for a 25 bp cut, and that such a cut will prove to be a disappointment for Wall Street. Why not be more aggressive? Because I think Bernanke is in a bit of a box, frankly. What's going on in the currency markets -- and the impact that’s having on other markets, like commodities -- makes it all but impossible to opt for a 50 bp reduction in the federal funds rate.

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