ASIAN MARKET UPDATE: FED OFFICIALS APPEAR DIVIDED IN ASSESSING ECONOMIC RISKS
- The Fed's Mishkin, a voting member, linked the trouble in housing and credit markets with consumer spending, signaling that the Fed was ready for a rate cut. Mishkin mentioned positive signs of business spending, and said that the Fed must remain vigilant on inflation. Traders said that today's Fed speeches show that there may be some disagreement on whether or how much to cut rates at next week's meeting, and that markets are bound to be disappointed by a 25bps rate cut (futures are priced for a 50bps cut at next week's meeting).
- The Fed's Mishkin, a voting member, linked the trouble in housing and credit markets with consumer spending, signaling that the Fed was ready for a rate cut. Mishkin mentioned positive signs of business spending, and said that the Fed must remain vigilant on inflation. Traders said that today's Fed speeches show that there may be some disagreement on whether or how much to cut rates at next week's meeting, and that markets are bound to be disappointed by a 25bps rate cut (futures are priced for a 50bps cut at next week's meeting).