1% is all that is left!

[beachhawg]

1%, then there is no fed rate.  Someone please convince me that continuous lowering of the fed rate is a good thing.  I just don't see it.  Do banks not need the money right now from private america as well as the government?  How long till the banks go bust?  This continual lowering in my opinion kills deposits and thus makes a bank less attractive to its own self.  Help me here, but, would rates this low not make banks tighten up their strings even more?

Also, how many more bullets does our government have?

[Masshog]

I said four years ago that the Fed needed to raise rates simply in the hope of gaining enough alititude to be able to eventually lower them...  Running out of altitude quickly.  But, they need to keep going.  I think people are going to be surpirsed at how quickly CPI falls over the next six months... Deflation is the problem now.

[SultanofSwine]

Is your expectation another 50bps in Dec? We were talking about inflation today at the office and we think that is 10-18 months out. It is going to not be much fun for a while yet in my estimation.

[The Marmot]

Werent abnormally low rates part of the original problem?

Also, consumer loan rates arent going down proportionally. Banks are still hoarding their money.

[MS_HogFan]

I said four years ago that the Fed needed to raise rates simply in the hope of gaining enough alititude to be able to eventually lower them...  Running out of altitude quickly.  But, they need to keep going.  I think people are going to be surpirsed at how quickly CPI falls over the next six months... Deflation is the problem now.

Deflation really isn't a problem if you can manage to keep your job. Is that correct or am I way off? If I am off please explain why. Thanks

[HotlantaHog]

Is your expectation another 50bps in Dec? We were talking about inflation today at the office and we think that is 10-18 months out. It is going to not be much fun for a while yet in my estimation.

Yes on 50 in December, absent some sharp recovery in economic data or huge easing in credit conditions.

[Biggus Piggus]

They can go to negative interest rates.  That would be gud.

[HognotinMemphis]

They can go to negative interest rates.  That would be gud.

I like the idea of being paid to borrow money.

[hawgbawb]

Deflation really isn't a problem if you can manage to keep your job. Is that correct or am I way off? If I am off please explain why. Thanks

Nobody wants to invest or make major purchases because they think it will lose value. Your home for instance as is now happening. It is hard to turn a sour economy around when the wallets are kept closed.

[HotlantaHog]

Nobody wants to invest or make major purchases because they think it will lose value. Your home for instance as is now happening. It is hard to turn a sour economy around when the wallets are kept closed.

Inflation expectations are still positive. According to the University of Michigan survey, people expect about 3% inflation a year for the next five years.... it is true that house values are falling -- that does not mean that inflation has disappeared.

[hawgbawb]

Inflation expectations are still positive. According to the University of Michigan survey, people expect about 3% inflation a year for the next five years.... it is true that house values are falling -- that does not mean that inflation has disappeared.

Some economists are more concerned about deflation, which is why the Fed has cut rates like crazy.

If the economy recovers, the specter of serious inflation is real.