August 08, 2007
Bernanke tells the imploding mortgage bankers and homebuilders to not let the door hit them on the way out
No surprise. If the Fed had lowered rates yesterday, the world would have ended for the US dollar. It's already in a heap of trouble, and China hinting that it would sell off its US Treasuries ain't gonna help much. With inflation roaring (real inflation, not government-reported inflation) a rate rise was actually more appropriate. But that would have caused havoc too.
Bottom line: Mortgage brokers, homebuilders, realtors on commission - you're on your own. The Fed ain't gonna cut. Nor can they.
The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.
The Federal Reserved left a key interest rate unchanged on Tuesday, citing a priority to control inflation even as it acknowledged volatility in the financial markets, including a tighter credit market and an ongoing housing downturn.