Nov 28 2007
Fed Split on Cuts, Minutes Show
Minutes from Federal Reserve Directors meetings in October reveal that the area banks were split on whether to cut rates. The WSJ reports that Richmond, Atlanta, Chicago, St. Louis and San Francisco and New York Fed banks all voted to cut rates. The banks voting against a rate change were the Philadelphia, Minneapolis, Boston, Cleveland, Kansas City and Dallas Federal Reserve banks.
The FOMC voted 9-1 in favor of the October cut with Kansas City Fed President Thomas Hoenig the lone holdout for no change.
You’d expect that to have some impact on the futures market, but nope–the market still expects another cut in December.
One Response to “Fed Split on Cuts, Minutes Show”
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A nice post from Macro-Man here: http://macro-man.blogspot.com/2007/11/time-to-act.html
Over the past few months, Macro Man has been fairly critical of the Fed’s relatively aggressive easing of the funds rate. He stands by that view, believing that the funds rate should be used to address macroeconomic issues. The current situation, by contrast, is a microeconomic problem- the non-functioning of certain credit channels in the economy- that threatens to become macroeconomic if not properly addressed.