Will the Fed provide more stimulus at the expense of the Dollar?
*Bloomberg, by Scott Lanman, February 13, 2008:
"The Federal Reserve's interest-rate cuts last month have failed to
lower borrowing costs for many companies and households, increasing the
chance of further reductions from the central bank.
Companies are paying more to borrow now than before the Fed reduced
its benchmark rate by 1.25 percentage point over nine days in January,
based on data compiled by Merrill Lynch & Co. Rates on so-called
jumbo mortgages, those above $417,000, have increased in the past
month, making it tougher to sell properties and risking further price
declines.
`It's the clogging up of the credit markets that worries me
most,' Harvard University economist Martin Feldstein said in an
interview in New York. `The Fed has done a lot of cutting, the question
is whether it's going to get the traction that it did in the past.'
Banks and investors are demanding greater compensation for offering
credit as losses mount on subprime-mortgage securities and concerns
grow that ratings of bond insurers will be cut. Elevated borrowing
costs mean Fed Chairman Ben S. Bernanke will have to reduce rates
further to revive the economy, Fed watchers said."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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