The US Fed cut again from 2.25% to 2%.
Now is the time to be reducing rates. But they’ve already come down so much in the past 2-3 quarters, while behaviour of policy makers and fiduciaries remains behind the game. I’m sure Ben would like to have additional room to reduce rates in case stimulation is required in the coming 6 months. (They can’t be negative.)
People and businesses unaffected by the housing market depression are now feeling the pain of energy and food inflation. (Oil is now at an all time high in real terms.) Its not just the US of course, but rich economies generally do not seem to be able to see their way to encouraging system change. There remains optimism (or hope) in equity markets – stock indicies are not that depressed but surely forecasts must have been reduced to account for recessionary dynamics. The global economy is fortunate to have China, India and other emerging economies to provide some stability while richer countries get used to the idea that growth must be replaced by equity in politics, society and even business.
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