Waiting For The Fed – Will They Or Won’t They And What Will It Mean
Found a great article on the subject. It’s long, but not boring.
The Money Quote:
On this day before the Fed’s next interest rate announcement, analysts are pretty much split with about half expecting another cut and about half expecting the Fed to stand pat at least until the next policy meeting on December 11. My guess is that the Fed will cut again tomorrow, but perhaps by only a quarter point.
If the Fed cuts rates by more than a quarter point tomorrow, this will likely be a sign that the FOMC believes the housing slump and the subprime mortgage troubles are worse than we think. Likewise, if they do not cut rates tomorrow, it will be a sign that the Fed believes the subprime meltdown is under control.