All speculation was against a rate cut, potential rate moves can be played on the market just like a horse can be bet at del mar. The line has been between 12-1 and 8-1 against a rate cut so how can you make the statement that “ALL SPECULATION LEAD PEOPLE TO BELIEVE THAT A RATE CUT WAS COMING?”
I haven’t checked the line for the remaining part of the year but I bet the odds are in favor of no cut for the rest of the year. Don’t buy in to the hype of the media getting excited over a fed meeting, study the fed, the chairman and the members continue to make statements that don’t indicate a cut unless that is what you want to hear. Everything I read from federal reserve members, past and present is that inflation matters more than the stock market. That they think corrections are healthy and are needed to prevent crashes. That credit worthy borrowers still have access to capital and that rates and liquidity shifts are only going to eliminate purchases that shouldn’t be made. The buyers of MBS’s are going through a flight to quality and those market forces are natural and healthy. I see this as the elimination of junk food on the menu and the investors realize they are risk for a heart attack for eating crap, but there’s still plenty of chicken and vegetables on the menu, so eat up becuase bernanke is a health food kinda guy.
The reality is that people with good credit and down payments will still be able to buy houses, the elimination of some buyers will cause prices to decline to historical levels and then all is right with the world, how is this something to be feared? How is this not completely expected? How many times have you read this on these boards?