We will find out on Tuesday, but don’t hold your breath, the odds of a 1/4 drop did increase from 7.5% chance to 12.5% chance on Friday. I’ve seen news reports of a 25% chance but if you want to place a wager on the fed funds futures it stands today at a 1 in 8 chance of a cut on Tuesday.
IMHO Bernanke and company are going to stand pat for the rest of the year and let things play out, econ 101, Laissez Faire. I’ve read extensively about Ben and I must say that I think the Cramer’s of the world should do more homework before accusing him of not caring about people losing their homes. He is very interested in the cause of the great depression and believes the fed could have turned it into a correction rather than a crash. I just read a piece he wrote in 2000 and he seems to believe that corrections are good, unsustainable growth or price appreciation is bad and he sees the role of the fed to step in to shorten disaster, not avert it. A perfect analogy would be that he sees the fed as an paramedic and not a seatbelt. Go too fast and you will get hurt, you should get hurt, we will just keep you from dying, treating your injuries, not preventing them.
