Quote:
Originally Posted by Lava
What does this mean for the Euro- plummeting on the news. Support for the US$?
Original way of providing support- maybe the US has had enough of the falling $..
|
The Fed is up in arms to prevent a full scale recession. The 2-year bonds are yielding just 1.5%, which means the Fed has to cut rate by as much as 150 bps to even the game. The Fed is apparently unwilling to do that record-breaking cut and instead resorting to alternate tactics to enable consumer and business spending. Thus, the odds of rate-cut in the next Fed meeting (on 18th) is reduced and even if they cut it won't be more than 0.5 to 0.75. We will know how much they will cut by looking at the short term bond yields the day before.
Naturally, this is going to be Dollar friendly. In particular if Fed signals end of rate-cuts it is going to trigger the reversal anticipated for a while.
