Friday, June 13, 2008
- a good deal of data that many people will use to discount an increase in Q2 GDP, exemplified by today's column from Carolyn Baum;
- the presence of an election year is going to keep many at the Fed a little skittish about being seen as playing a role in the contest. If it is as seen as making a possible recession worse because of pre-emptive tightening, it may face a threat to its independence next year.
- The lower fed funds rate has yet to translate into lower borrowing costs for the average American.
- The Fed would appear confused and damage its credibility with the financial markets if it were to raise interest rates so soon after cutting them.
- Higher interest rates would aggravate the pain in the housing market especially given the large number of adjustable rate mortgages that are in the process of resetting to higher interest rates.