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Jan 6, 2010, 3:36am

Temple Economics Society Forum :: Economics Discussion :: The Economic Winds :: Mr. Bernanke, cut those rates

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Topic: Mr. Bernanke, cut those rates (Read 85 times)

Steven C. Frable
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Mr. Bernanke, cut those rates
« Thread Started on Sept 13, 2007, 9:49am »

I am kind of in a rut with the whole stock market thing. The September 18th FOMC meeting is coming up and EVERYONE is expecting a rate cut. What if Bernanke does not do it, will everyone be in financial turmoil?

I fell like the 18th is going to be one those really important days of my life, kind of like when JFK was shot for my parents...ok, maybe I am taking the whole economy a little bit too seriously, but can anyone make the connection that this may be a big deal? I mean in 2001, (didn't even know what was going on at the time) it was a big deal...

What do you guys think?

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luckyxstar
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Re: Mr. Bernanke, cut those rates
« Reply #1 on Sept 13, 2007, 1:33pm »

I'd say to Mr. Bernanke: "Cut those rates and increase the money supply!!" That what he can run this bitch into the ground and everyone can flee and move AWAY to ICELAND!

In all seriousness, explain to me: what will a rate cut do? Wouldn't it just increase the amount borrowed, but not fix the problem of people paying their debts? But if he raise it stocks will fall, and people will cry? OR he can just not do anything?

« Last Edit: Sept 13, 2007, 1:39pm by luckyxstar »

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Steven C. Frable
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Re: Mr. Bernanke, cut those rates
« Reply #2 on Sept 14, 2007, 2:34pm »

Most likely he will do nothing. Cutting rates will have a huge impact on the financial markets. Everyone wants one because they are whining, like me, but I am not expecting a cut. Just everyone else is. And if he does cut rates, inflationary pressures increase.

Right now I think that inflationary pressures are strong (look at PPI, employment and productivty numbers) and that if he cuts rates the financial markets will be out of the rut they are in now. However, we may have decreasing economic growth in the upcoming quarters due to housing, and that a rate cut may even cause...

STAGFLATION! OH NO!! Everyone run!

As long as exports continue to increase, hopefully we won't have to worry about it. However, oil hit $80 yesterday, so that get canceled out so maybe we are screwed.

I think Bernanke knows what he is doing and understands that GDP is just an overall indicator and should not justify any policy move until all sectors can put the economic situation into perspective.

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