Re: Will Bernanke see his shadow?
Markets will be Markets!
There is no such thing as controlled fiscal policy. All that can be done is to make the best guess and go with it. Psychology runs all markets, always has and always will. It doesn't really mater who is Fed Chairman or who is President or what party runs the halls. All we can hope for is that we don't really mess it up. The study of the history of markets all the way back to Roman Empire days shows that financial concerns run in cycles, some more predictable than others.
The lower dollar has negative impacts as we can see in commodities (as mentioned) and travel abroad. But it has positive impacts on exports as any export marketer will tell you. (they have been in BOOM times for the past 4 years!). These exports can create jobs, and have. BUT it may lower the cost of labor here since the margin is tight.
Personally i can see a move to lower rates being warrented but the markets may take it as a sign of desperation. I hope the FED remains firm after this lowering for some time.
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