Justin Lahart in Ahead of the Tape column writes about rate . It seems pretty obvious to most people that rate cuts will not solve the biggest problem out there which is Housing.
The rates will also weaken the dollar and increase commodity prices. That will increase "Real" inflationary pressure (Not the fake CPI stuff).
The problems in housing are less related to high interest rates now than to the hangover after a period of feverish speculation spurred by low rates before. No matter how low rates go, many of the people who would have qualified for mortgages when banks were lending recklessly aren't going to qualify anymore. With home prices in many areas declining, no matter how low rates go, many people will be reluctant to buy -- using borrowed money to purchase a depreciating asset isn't an obvious step to take. What housing really needs is time to heal its wounds. The Fed can't drop that from helicopters.
http://online.wsj.com/article/SB119422200754581966.html?mod=todays_us_money_and_investing
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