Fed speech

[TonyM]

Based on Bernanke's and Plosser's comments, I would seriously doubt any rate cuts for the foreseeable future. The comment about the housing downturn not being unwelcome tells me they will not cut rates to bail out housing. The best we can hope for is for them to maintain rates, but unless the rest of the economy slumps I'd bet on an increase before a decrease.

[Svenwulf]

OT- who's phone was going nuts during that speech?

watch unit labor costs, watch unit labor costs, watch unit labor costs. i called for a hike start of 2Q07 (or sooner), but now i am nervous. might have to be a cut, that sets up a 20s redeux. its ok though, i am buying gold.

[TonyM]

OT- who's phone was going nuts during that speech?

watch unit labor costs, watch unit labor costs, watch unit labor costs. i called for a hike start of 2Q07 (or sooner), but now i am nervous. might have to be a cut, that sets up a 20s redeux. its ok though, i am buying gold.

That was me calling Ben to tell him that us Capitalists would like a rate cut.

I'm not seeing how you read a possible cut from that speech? Inflation is apparently their main issue, and they are not concerned about housing, stating that the inventory will sell off and work itself out. All of the talk of an economic slowdown or recession seems to be due to the housing bust and the domino effect it has on sectors/companies levered to it. Based on that I think they are not worried about the economy slowing down, and in fact they think it is a good thing, which leaves no reason to cut rates. I may have missed something in the speech as I was watching multiple bid/ask's while listening/watching Bloomberg tv's coverage, so correct me if I misinterpreted something.

[madcowdisease]

Personally I'd like to see rates go higher. I'm still waiting for all the specualtion in the housing sector to be shaken out. Despite a 3.5% YOY decline I think we can do better. I'm no hostorian but I'd be willing to bet the dramatic rise in home prices we saw the past 5 yrs was unprecedented and therefore we need an unprecedented decline to get back to basal.

[Imperator]

well, maybe the weakness in the dollar will lead to more expensive imports... more inflation, yada yada....

but what I got out of the speech was that they were probably going to be holding rates for quite a while.

[robvia]

December 12th is when everyone finds out. I predict the rate stays level, then goes up next year.

[Svenwulf]

OT- who's phone was going nuts during that speech?

watch unit labor costs, watch unit labor costs, watch unit labor costs. i called for a hike start of 2Q07 (or sooner), but now i am nervous. might have to be a cut, that sets up a 20s redeux. its ok though, i am buying gold.

i dont suppose anyone caught pimco's release today? howd ya like them labor costs today? maybe if i save up i can get a gold foil hat.

[TonyM]

i dont suppose anyone caught pimco's release today? howd ya like them labor costs today? maybe if i save up i can get a gold foil hat.

I thought about that post when those labor cost numbers came out today. As long as you consume oil while mining the gold it's good with me;)
Watch the oil inventory report numbers tomorrow at 10:30, whichever way it goes it's likely to take gold along with it. I'm thinking the analysts are wrong this week; Opec's cuts may show up more than anticipated, plus there may have been increased heating oil buying as some consumers apparently stockpiled some when it was cheaper a month or so ago. I don't think the refinery's are up to expected operating capacity either.