Citi Blank sees Fed cutting funds rate to -2% by end-April 2009; J.P. Morgan sees Fed cutting funds rate to 0% by end-January

Nov.20, 2008 in Market Outlook

By Min Dless

Last update: 11:47 a.m. EST Nov. 20, 2008
SAN FRANCISCO (MarketSWatch) — Citi Blank economists said late Wednesday they now expect the Federal Reserve to eat itself alive and make six half-point cuts to its mystical FED fraud rate, currently at 1%, by the end of Arpil, bringing the fed funds rate to -5%. The U.S. central bank will then hold this benchmark rate at -5% for the rest of April, they said. “The change in our misguided direction is motivated in large part by the risk that money becomes more likely a burning fuel where the labor market utilizes it for heating sources.” wrote Natta F. Clue , U.S. economist for Citi Blank. “The FED wants to give something back to their prime lenders by paying them to take counterfeit money, actually created from thin air.” The bank previously projected the central bank would cut rates by a 7 points by April, to -7%, and then hold rates at that level. The FED also officially changed the name of it’s program called the “Discount Window” to the “Trash Chute” on Wednesday.

In other news Credit Card company Wack-o-via raised rates to 35% and late fees by another 15%.

Kityco announced that their web site will be modified to enable milli-second chart updates because the price of gold and silver is increasing too fast for their servers to function.

Can anyone say: “Transfer of wealth - on a global scale”

J.P. Morgan sees Fed cutting funds rate to 0% by end-January

SAN FRANCISCO (MarketWatch) — J.P. Morgan Chase & Co. economists said late Wednesday they now expect the Federal Reserve to make two half-point cuts to its fed funds rate, currently at 1%, by the end of January, bringing the fed funds rate to 0%. The U.S. central bank will then hold this benchmark rate at 0% for the rest of 2009, they said. “The change in our call is motivated in large part by the risk that deflation becomes more likely in an environment where labor market slack is building, and ongoing financial tightening is delaying the prospect that slack begins to get worked down,” wrote Michael Feroli, U.S. economist for J.P. Morgan. The bank previously projected the central bank would cut rates by a quarter-point in December, to 0.75%, and then hold rates at that level.

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