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Comments on: March 08: Fed cuts rates to 2.25 http://www.tvhe.co.nz/2008/03/19/march-08-fed-cuts-rates-to-225/ The Visible Hand in Economics Wed, 19 Mar 2008 23:24:54 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Duric http://www.tvhe.co.nz/2008/03/19/march-08-fed-cuts-rates-to-225/#comment-1121 Wed, 19 Mar 2008 23:24:54 +0000 http://tvhe.wordpress.com/?p=298#comment-1121 Let me introduce myself, my name is Kunta Kinte and 0 % reserve is my nomination for the Nobel Prize. Is it the key of my salvation or it is the reason for my starvation, you decide. God bless Plunge Protection Team.

]]> By: CPW http://www.tvhe.co.nz/2008/03/19/march-08-fed-cuts-rates-to-225/#comment-1118 Wed, 19 Mar 2008 01:42:25 +0000 http://tvhe.wordpress.com/?p=298#comment-1118 I do like to read Barry Rhitholz on finance but i disagree with him completely on that whole “the government is lying to us about inflation thing”.

]]> By: Matt Nolan http://www.tvhe.co.nz/2008/03/19/march-08-fed-cuts-rates-to-225/#comment-1119 Tue, 18 Mar 2008 20:54:39 +0000 http://tvhe.wordpress.com/?p=298#comment-1119 “the last core inflation reading was 0% m-o-m, so maybe they’ll be worrying about deflation again before long”

I did see that indeed, but then I also read this article from the big picture:

http://bigpicture.typepad.com/comments/2008/03/cpi-2008-vs-198.html

Two things that came out of it were:

1) Petrol prices were a negative contributor to the CPI rate and they have risen significantly since.

2) We shouldn’t based our forecasts on a single datapoint in a volatile series.

That is why I said “If the CPI measure ticks up, will this be the end of rate cuts?” – I’ll definitely be interested in seeing the March CPI figure.

“maybe they’ll be worrying about deflation again before long”

Who knows, the US might end up in a liquidity trap . Then we would have two modern case studies to show first year economics students 😉

]]> By: CPW http://www.tvhe.co.nz/2008/03/19/march-08-fed-cuts-rates-to-225/#comment-1120 Tue, 18 Mar 2008 20:46:59 +0000 http://tvhe.wordpress.com/?p=298#comment-1120 Markets got their rally on regardless. Two dissenting votes this time, so certainly a hawkish camp emerging. I don’t know if you saw Matt but the last core inflation reading was 0% m-o-m, so maybe they’ll be worrying about deflation again before long.

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