Lara Rhame Rate Quotations

Most people at the Fed seem to feel that the national economy is strong enough to absorb the effects of Katrina. That to me seems that you will not see the Fed rate hike derailed.

Market expectations have priced a rate cut in. When markets are pricing it in like that, the Fed can't afford to give a downside surprise in this environment.

We're not pricing in rate hikes any time soon, and today's data won't change that. Inflation is off the radar screen for policy makers.

We saw the unemployment rate actually holding throughout most of this slowdown, and only about four months ago we were at a 4.5 percent unemployment rate, ... The average recession sees a lot of job losses, so we've got a lot of catching up to do.

The weaker-than-expected housing number still leaves housing at a fairly high level of activity but will raise some eyebrows as markets worry about the (Federal Reserve) overshooting (with rate hikes).

There's a growing effort within the Fed to look for other ways to add liquidity into markets and to sustain the interest-rate-led growth we've had. I think they are going to move to a bias to ease policy again, but I'd look for the ease somewhere else. It won't be a rate cut.

Everybody has to learn a little more economics than they want to learn, now that we're drawing more and more of a distinction between actual GDP and final domestic demand, which is GDP minus inventories. Inventories can surprise. It's hard to make a solid forecast about them, and the Fed said that. I think the market continues to overestimate Fed rate cuts.

The consumer is the last support here, and it's not getting any help. The savings rate plus the confidence plunge add up to enough reasons for the Fed to give consumers a psychological boost.

The markets have probably been too quick to connect the dots from the current slew of good data straight to a Fed rate hike,

The market reacted exactly the way they wanted it to, which was to flatten the yield curve. I think the point is clear: Policy makers are going to do whatever they can to help the Fed. The rate cuts that the Fed is putting through are only hitting the short curve; they're only psychological.