The FOMC statement was mostly unchanged from the previous meeting. The Fed did acknowledge the effect the (drastically!) cooling housing market was having on the economy.

All in all, I think it was a bit more dovish than most were expecting. Dollar bulls certainly didn’t seem to like it. I think it was about right. I still don’t think we have seen the full effect of the housing market slowdown and expect the economy to continue to weaken in the coming months. Most economists don’t see a recession ahead. While I’m inclined to agree with them, I think the market may be underestimating the odds of one.

Federal Reserve Chair Ben Bernanke (above) discusses
his most recent fishing trip with reporters.



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