Impact of Fed lowering rates?

[GoUSC]

The CEO of Autonation is saying the Fed needs to lower rates to jump start the auto industry. If the Fed were to lower the rate, say 50bps, what kind of short term and long term impact do you think that would have?

[what_a_disasta]

The stock market would spike, which will be nice for all the ‘big boys’ who get the early wink from their man Paulsen , but by the time we hear about it, it will be “priced in”.

The dollar would be pounded heavily and all of your dollar denominated assets would lose value.

Unfortunately for housing, I dont think 0.5% is going to help at this stage, rates arent exactly high and if standards have really got tighter, then all those flakes and specuvestors that were helping prop up the bubble will still be unable to qualify to buy, even if the rates dropped by 5%.

[what_a_disasta]

The stock market would spike, which will be nice for all the ‘big boys’ who get the early wink from their man Paulsen , but by the time we hear about it, it will be “priced in”.

The dollar would be pounded heavily and all of your dollar denominated assets would lose value.

Unfortunately for housing, I dont think 0.5% is going to help at this stage, rates arent exactly high and if standards have really got tighter, then all those flakes and specuvestors that were helping prop up the bubble will still be unable to qualify to buy, even if the rates dropped by 5%.

[LookoutBelow]

It aint gonna happen…..My bet is he protects the dollar and says to hell with the auto makers and dealers, as with most ALL other industries in this country.

 

[LookoutBelow]

It aint gonna happen…..My bet is he protects the dollar and says to hell with the auto makers and dealers, as with most ALL other industries in this country.

 

[cr]

I said this before on another post. Lowering rates is liking throwing gasoline on the fire. Directly or indirectly, lowering rates got us into this mess, and then some. Lowering them even after they’ve come up isn’t going to help.

[cr]

I said this before on another post. Lowering rates is liking throwing gasoline on the fire. Directly or indirectly, lowering rates got us into this mess, and then some. Lowering them even after they’ve come up isn’t going to help.

[SD Realtor]

It will definitely be interesting to see what happens… Seems like the market is betting he actually will lower rates based on the bond market rallying… However I just do not see how he could lower them given the weakness of the dollar. Even if he does lower the rates I don’t think it will affect the housing market slide.

SD Realtor

[SD Realtor]

It will definitely be interesting to see what happens… Seems like the market is betting he actually will lower rates based on the bond market rallying… However I just do not see how he could lower them given the weakness of the dollar. Even if he does lower the rates I don’t think it will affect the housing market slide.

SD Realtor

[Chris Scoreboard Johnston]

We have rallied over 5 full points off the lows in the 30 Yr, so this is already a significant rally, will it stick?

I think it will if history is any guide. Alot of people in here think it will be different this time in many asset classes, so if they are right, it will not hold. I bet with history, and at times I am wrong, but my odds are good.

This rally takes the Fed off the hook if it sticks. Rates are already lower over the last 2 months, and they have not had to do anything. This is what is referred to as the PPT ( Plunge Protections Team ) at work. Remember, the Fed does not control the rates that banks extend to consumers.

[Chris Scoreboard Johnston]

We have rallied over 5 full points off the lows in the 30 Yr, so this is already a significant rally, will it stick?

I think it will if history is any guide. Alot of people in here think it will be different this time in many asset classes, so if they are right, it will not hold. I bet with history, and at times I am wrong, but my odds are good.

This rally takes the Fed off the hook if it sticks. Rates are already lower over the last 2 months, and they have not had to do anything. This is what is referred to as the PPT ( Plunge Protections Team ) at work. Remember, the Fed does not control the rates that banks extend to consumers.

[Author]

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