Fed cuts rate 1/4 point

[Bradley in DC]

http://www.federalreserve.gov/newsevents/press/monetary/20071031a.htm

For immediate release

The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 4-1/2 percent.

Economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance. However, the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction. Today’s action, combined with the policy action taken in September, should help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and promote moderate growth over time.

Readings on core inflation have improved modestly this year, but recent increases in energy and commodity prices, among other factors, may put renewed upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.

The Committee judges that, after this action, the upside risks to inflation roughly balance the downside risks to growth. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Donald L. Kohn; Randall S. Kroszner;
Frederic S. Mishkin; William Poole; Eric S. Rosengren; and Kevin M. Warsh. Voting against was Thomas M. Hoenig, who preferred no change in the federal funds rate at this meeting.

In a related action, the Board of Governors unanimously approved a 25-basis-point decrease in the discount rate to 5 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Richmond, Atlanta, Chicago, St. Louis, and San Francisco.

[kylejack]

Thanks, I was waiting for this.

[Bradley in DC]

http://www.reuters.com/article/marketsNews/idUKN3137314120071031?rpc=44

N.Y. gold futures gain early ahead of Fed decision
Wed Oct 31, 2007 10:34am EDT

NEW YORK, Oct 31 (Reuters) - Gold futures in New York rose
slightly in quiet trade early Wednesday on the dollar fall and
higher crude prices, as the bullion market bided time ahead of
a key interest rate decision by the U.S. Federal Reserve after
the end of the pit session.
"I don't think we are going to see much until the FOMC
today. Gold's up a couple of bucks, but there is very, very
little activity right now. I think we are just going to wait
until this afternoon," said one precious metals dealer in New
York.
At 10:17 a.m. EDT (1417 GMT), most-active December gold
(GCZ7: Quote, Profile, Research) on the COMEX division of the New York Mercantile
Exchange was up 80 cents at $788.60 an ounce, trading between
$780 and $791.20.
Prior to the rate decision by the Federal Reserve Open
Market Committee (FOMC) at 2:15 p.m. EDT, a government report
showed that the U.S. economy grew at a surprisingly brisk clip
in the third quarter. [ID:nN31287901]
The dollar initially jumped after the robust U.S.
productivity report but fell back toward its record low against
the euro by midmorning on expectations the Fed will cut interest
rates later in the session.
Crude oil bounced off early lows to above $91 a barrel as
the market awaited key U.S. data on crude inventories and the
Fed decision.
Gold is used by investors as a hedge against inflation,
while a lower dollar makes gold, which is denominated in the
greenback, cheaper for holders of other currencies.

[a_european]

" In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully."


Carefully.. yeah right :rolleyes:

But Hooray for precious metals.

[Bradley in DC]

Yeah, I expected it--happy with Hoenig though and disappointed with Kroszner (who knows better).

[Bradley in DC]

http://www.marketwatch.com/news/story/fed-cuts-us-interest-rates/story.aspx?guid=%7BB866D453%2D9D41%2D4081%2D8D61%2 D5FB15C1EFAB1%7D

Although the votes at the Fed meetings had been unanimous, offering the veneer of unanimity, some nonvoting regional Fed bank presidents are thought to be wary of too many rate cuts out of a concern about the possibility of triggering inflation. Hoenig joined them on Wednesday, casting a vote to hold rates steady.
Several presidents are known to be worried about the so-called "moral-hazard" issue, that the Fed is helping bail out some Wall Street players from their bad bets, thus encouraging more wasteful investments in the future.
These presidents showed their dissatisfaction in a relatively obscure way, by voting against a reduction in the Fed's discount rate in mid-September. See full story.
In Wednesday's meeting, only six of the 12 regional banks requested a cut in the discount rate, which could show little support for more aggressive action ahead, Moran said.

[paulitics]

yay, a further spike in oil and commodity prices, and a further decline in the dollar. This economy is spiraling out of control. Basically money is worthless, and housing declines will continue because people can't afford to put gas in their cars.

[Daveforliberty]

"In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully."

Some inflation risk... Since the definition of inglation is increase of the money supply, and since the government is busy printing money, "some" is at best a joke and at worst a lie.

[Green Mountain Boy]

some nonvoting regional Fed bank presidents are thought to be wary of too many rate cuts out of a concern about the possibility of triggering inflation.

LOL, what a joke. That's the whole reason for the rate cuts - to keep the inflation from stalling out.

[Bradley in DC]

http://orange.advfn.com/news_Gold-rallies-after-Fed-cuts-funds-rate_23027195.html

Gold rallies after Fed cuts funds rate

NEW YORK (AP) - Gold barreled higher Wednesday but stopped short of the $800
mark as investors cheered the Federal Reserve's decision to lower its benchmark
interest rate by a quarter point.

[ladyjade3]

http://www.house.gov/paul/press/press2007/pr103107.htm

Congressman Ron Paul, ranking member of the Subcommittee on Domestic and International Monetary Policy (DIMP), and a nationally recognized expert on monetary policy, issued the following statement regarding the Federal Reserve’s decision to again lower interest rates:

“ America ’s economic difficulties, especially the problems in the housing market, are the direct result of the Federal Reserve’s inflationary policies. In the past year, we have seen MZM grow by 12%, yet the Fed continues to inflate the money supply. While prices for gold, oil, and staple commodities continue to rise, the purchasing power of the dollar for all Americans continues to fall. Inflationary monetary policies created the problems in the economy we are seeing, and these problems will be made worse, not better, by more inflation. Today’s action by the Fed is very bad news for American workers and retirees who are about to get hit with yet another jump in prices.

Make no mistake, the problems faced by the American people are not caused by unscrupulous mortgage brokers or the rising price of oil. These are symptoms of an economic disease caused by a spendthrift Congress enabled by loose monetary policy. Too many pundits praise the weak dollar as benefiting exporters, but they fail to see the harm done to thrifty, hard-working Americans. Rather than continuing to pursue a policy of easy credit and increasing debt, we need to return to a sound monetary system.”

[PatriotG]

Futures for December Delivery reached 800.80 per ounce.
Silver For December Delivery reached a high of 14.615 per ounce.

PatriotG

[OptionsTrader]

yay, a further spike in oil and commodity prices, and a further decline in the dollar. This economy is spiraling out of control. Basically money is worthless, and housing declines will continue because people can't afford to put gas in their cars.

Agree.

Invest like Dr. Paul.

ABX and other gold miners...

[OptionsTrader]

http://goldmoney.com

[RP4ME]

http://goldmoney.com

2nd that and the-money-changer.com for when tshtf

[PatriotG]

Futures for December Delivery reached 800.80 per ounce.
Silver For December Delivery reached a high of 14.615 per ounce.

PatriotG

Fridays Activity was most interesting

Futures for December delivery had no problem breaking throught the MAJOR psychological barrier of 800.00 per ounce. Settlement was posted at 808.50!

We are trading at levels not seen since 1979.

Silver for December Delivery is closing in on the highs made in March
14.59 per ounce settlement.

I am going to refrain from posting my opinion on where I think these are going.


PatriotG

[freelance]

Skip down to the articles.

http://www.jsmineset.com/home.asp

For the record, Jim is almost always right, even if his timing is sometimes a little bit off.

[Bradley in DC]

http://www.house.gov/paul/press/press2007/pr103107.htm

Congressman Ron Paul, ranking member of the Subcommittee on Domestic and International Monetary Policy (DIMP), and a nationally recognized expert on monetary policy, issued the following statement regarding the Federal Reserve’s decision to again lower interest rates:

“ America ’s economic difficulties, especially the problems in the housing market, are the direct result of the Federal Reserve’s inflationary policies. In the past year, we have seen MZM grow by 12%, yet the Fed continues to inflate the money supply. While prices for gold, oil, and staple commodities continue to rise, the purchasing power of the dollar for all Americans continues to fall. Inflationary monetary policies created the problems in the economy we are seeing, and these problems will be made worse, not better, by more inflation. Today’s action by the Fed is very bad news for American workers and retirees who are about to get hit with yet another jump in prices.

Make no mistake, the problems faced by the American people are not caused by unscrupulous mortgage brokers or the rising price of oil. These are symptoms of an economic disease caused by a spendthrift Congress enabled by loose monetary policy. Too many pundits praise the weak dollar as benefiting exporters, but they fail to see the harm done to thrifty, hard-working Americans. Rather than continuing to pursue a policy of easy credit and increasing debt, we need to return to a sound monetary system.”

Well said, great to have a voice of reason in the world!

[TheEvilDetector]

http://www.jsmineset.com/cwsimages/inventory/47401_Sinclair5.jpg