Gold News

Markets anticipate further action from 'feeble Fed'

US stock futures recovered somewhat today (December 12th) after dropping dramatically late Tuesday, but Wall Street remained up in arms over the smaller than expected rate cut.

The Wall Street Journal claimed that the Fed was ready to consider manipulating tools other than the Fed funds and discount window rates that it cut yesterday, as markets moved up in the hope that more help was on hand.

Yesterday's reaction to the quarter point cut saw disappointed investors inflict the worst one-day drop-off in stocks for more than a month, with Dow Jones industrials falling almost 300 points.

Today's trading saw Dow industrial futures up 85 points, alongside Nasdaq's 16.25 point rise, reflecting a sense of expectation in the Federal Reserve's willingness to intervene further and make lending easier.

David Jones, chairman of Florida's Investors Security Trust, told the Los Angeles Times that the as it was, the cut "was not as forceful as it should have been, and their statement wasn't as forceful as it should have been".

"They should have said they would do what it will take to deal with the credit crisis," he added.

The Fed avoided any wording that would suggest to the economy were greater than the risks to inflation – suggesting that it would not indiscriminately manipulate rates and risk a money supply swell merely in order to stimulate lending.


See all articles by Gold Bug here.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals