It’s Monday, and after Friday’s losses on Wall Street and major declines in Asia and Europe, the markets may be headed down this morning as well. Included in the usual morning back of dismal news this morning was this interesting tidbit- a hint from the Fed’s Plosser- RATE CUTS MAY BE TEMPORARY:
The level of the Fed’s benchmark interest rates is lower than standard monetary policy rules call for and therefore must be transitory and reversed in due course or inflation expectations may become unmoored, said Philadelphia Fed Bank President Charles Plosser on Monday. Plosser said that the turmoil in financial markets is a good reason why policy is lower than implied by policy rules. "But such devisations should be temporary and limited and promptly reversed when conditions return to normal," Plosser said.
