Fed Day

It's a fed day today.  With the fed expected to cut the rates by 50 basis points. 
In someways I feel sorry for Ben B.  At the beginning of his term, it truly looked liked he wanted to change the fed from the way Greenspan ran it.  But then the market started tanking and he was under pressure to cut rates. 

In September he cut by 50 basis points as the markets were going down.  To me that seemed to be the turning point of Ben B.  It seemed like that rate cut was only to pacify markets.  After that markets have controlled the fed.

It's gotten so bad that you are seeing articles in MSM.  Before it was only few bloggers talking about fed pacifying the markets.  Now it's all over the place.  So it will be interesting to see if Ben will stand up to the markets and only cut by 25 basis points or less.  I doubt we will get that, but there is always hope.

The fed is in a no-win situation.  It will be criticized if it cuts rates and even if it does not cut rates.  But one thing to remember is that you can't satisfy everyone all the time.  And in trying to do that, Ben B is satisfying no one. 

So instead of worrying about the markets, it's time for the fed to worry about the economy and ensure that in the process of lowering rates, we do not get another bigger bubble.