Federal Reserve Chairman Ben S. Bernanke signaled he has resolved months of debate over the competing risks of slower growth and faster inflation, and is ready to make deeper interest-rate cuts.
Bernanke yesterday pledged ``substantive additional action'' to insure against ``downside risks'' to the six-year economic expansion.
Bottom line. The markets always win. The rate on Treasury bills (driven by the markets) is too low (close to 3%). The Fed is way behind the curve by keeping the fed funds rate at 4.25%.
Besides, financial risk keeps rising and the Fed will have to continue easing as long this is the prevailing trend. The markets always win.
More on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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