I told You So

I've been asking the Fed to cut rates since the birth of this blog. In Bernanke's stubborness to show is monetary manhood he's overtightened and held on too long causing a freeze up in the credit markets. Memo to Bernanke, it's much easier to lower the Fed Funds rate than to continually pump daily emergency liquidity into the financial markets..............

U.S. Rate Cut Looks More Likely

Central banks pumped money into distressed markets for the second day to relieve strains in money markets, while investors concluded the Federal Reserve is increasingly likely to cut rates soon and that rate increases in Europe and Japan may be deferred.

Explaining that it was "providing liquidity to facilitate the orderly functioning of financial markets," the Fed injected $38 billion, following Thursday's $24 billion. The European Central Bank, saying that its "liquidity-providing fine-tuning operation" was aimed at assuring orderly market conditions, added $83.56 billion following the $130 billion it injected to euro-zone markets Thursday.......

........Futures markets place high odds on the Fed cutting the rate target to 5% at its Sept. 18 meeting, and some possibility of a cut before then. The decision turns on how conditions in credit markets develop in coming days. If they don't improve, officials would probably be inclined to cut rates to offset the negative impact.

By JOELLEN PERRY and GREG IPAugust 11, 2007 - WSJ