The FOMC said that its 125-point cuts in January "would likely not contribute to an increase in inflation pressures given the actual and expected weakness in economic growth and the consequent reduction in pressures on resources."
Translation: A slowing economy -- consequently slowing demand for raw materials -- will put the kibosh on any bad things that might happen as the dollar gets crushed. The Fed did, however, leave the door open for a “rapid reversal” in policy, should the need arise. After all, the Fed’s charter says it’s supposed to promote “price stability.”
To review: Cutting rates won’t increase inflation, because the economy is slowing down. But raising rates quickly will stem inflation in a pinch. Got it?
What happens to the economy, then? Hmmmn….
6 comments:
Dear Qianhu,
This is CATstalker from MITBBS. I found your blog when I was doing some research on stocks.
I couldn't wait and went over all the posts and most of the interesting comments here.
I am so grateful to, and moved by you and many other people such as bobo. I feel like I have found a place, like a home that I would like to visit once in a while.
bobo mentioned the "black house" to me, I wonder if I can join the discussion group. I am still a frog, but I am willing to learn and contribute to the group if I am given the opportunity.
Thanks again.
CATstalker
Hi, Qianhu,
Are you going to update your tracking list? Maybe better to wait to the turn. Looking forward to it though.
Dear CATstalker,
currently we are thinking about getting more people to join if necessary. I will keep you posted:)
Qianhu
Hi, Hooper,
yes, I will update the tracking list pretty soon.
But before then , wondering what the timeframe you are interested in?
Well, I started about 10 month ago. Originally hoping to make some quick kill. However, later I realize investing/trading is a career if you want to be good at it. I consider myself lucky because one, I didn't suffer a huge loss before pull out; two, not everyone get in right before a bear market which keeps my head cool and gives me an invaluable experience.
Now, I am more interested in investing in mid to long term with a diversified portfolio (not just stock). I'd say my time frame is around 6-18 month. The same time, I am trying a little of everything in order to improve the performance. This includes trading around my core position based on TA, combining option strategies and dynamic asset allocation. Gonna be a multi year project :). I am still at the stage of collecting all the pieces.
I asked about the list out of curiosity though I do hope to learn something from analyzing it. Hope this give you enough to know my background. Cheers!
hehe, sure , hooper:)
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