All eyes on Helicopter Ben …

Fed decision tomorrow … and all eyes on Ben Bernanke … known as Helicopter Ben

We waited for January and hoped for 50 bps … fantasized of 75 bps … got them already (thanks to SocGen) and … ???

YES … market has priced in quite fully a further 50 bps rate cut … OMG

The last cut had not all members supporting it, but the market wants more? This is a tricky one!

As market is fragile, Fed might not want to dissappoint the market, BUT … tomorrow we have Q4 GDP and on Friday we face payroll Friday …

Usually, I would bet on 25 bps only, but as Ben is known to be quick with his helicopter and maybe as an insurance for weak payrolls, 50 bps seems to have a chance.

Bad thing … it won’t help much now, but inflation threat later becomes even bigger

Here the headline, I would really LOVE, but won’t see tomorrow … “Fed says, subprime problem under control, banks have sufficient liquidity, therefore we hike rates by 200 bps to fight off inflation”

A DREAM, which unfortunately is far off reality …

Tags: Bernanke, FED, rates

This entry was posted on Dienstag, Januar 29th, 2008 at 23:51 and is filed under FDAX. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.