Friday, March 09, 2007

Interest Rate See-Saw

I love competing news stories. Today, let's have them play with each other. On the first side of the see-saw, we'll put the possible-rate-cut gang:
March 8 -- ( In light of the weaker economic data of late, investors are once again betting heavily that the Federal Reserve will cut interest rates this year. The ongoing housing recession, concerns about additional fallout from subprime mortgage defaults, a weaker manufacturing sector, and a slower pace of hiring are all helping to revive expectations of lower rates.
On the other side, let's sit the no-cut folks:
March 9 (Bloomberg) -- Treasuries declined the most this year as a stronger-than-forecast government jobs report reduced bets the Federal Reserve will cut interest rates by midyear.
Hmm... the see-saw seems pretty evenly balanced. My conclusion? We need more data to jump on one side of the saw or the other. In the mean time, feel free to take your pick about which story you like more.

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