The Fed cuts 3/4 of a point - is that what the Dr. ordered?

By
Real Estate Broker/Owner with Cornerstone Realty Partners

Why do I get the feeling that I've seen this before? The Fed makes the surprising move to cut 3/4 of a point mid session. What do they see that we haven't yet? Has the market gotten that much worse, or does the Fed think that it's previous measured response was not having the desired effect?

I know the pundits are calling for recession. The politicians are calling for a soft landing. (When was the last time there ever was a soft landing?) The issue here isn't mortgage rates, but consumer spending. As evidence of the major retailers at Christmas, people are spending less. For consumers who already have too much debt, or had a late payment on any of their credit cards, will this really help - or are they still going to have their rates raised (even if they've been current on that specific card?) When the prices of basic necessities of food, energy and health insurance premiums rise, of course we are going to see a slow down in other spending. So should we:

  •  take on more debt
  • figure out how to slow down or decelerate the prices of these core items
  • or work on improving the income opportunities for the average family?
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Rainer
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Epcon Communities Epcon Columbia
Epcon Columbia, SC - Columbia, SC
As for the soft landing, the answer is most times.  Most times, the media is wrong about recessions.
Jan 22, 2008 02:18 PM #1
Rainer
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Lance Winslow
The Car Wash Guy - Malibu, CA
Indeed this is a lot more complicated then just that, although I must say when I woke up and saw that, I was thinking exactly what you are right now. Good post, sure makes you wonder does't it? Lance
Jan 22, 2008 04:36 PM #2
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Rainer
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Frank Rizzo

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