Thursday, October 30, 2008

Rate Watch 10/30/08: Floating

The 3rd Quarter Advance consumer spending report came in today at the fastest decline in 28 years, and the 3rd quarter GDP report decline indicates we are heading toward the "textbook" definition of a recession which is two consecutive quarters of declining GDP.

Both reports have softened the stock market and we have a level of support in the Bond Market that prices are currently hovering above.

With the Fed Funds rate cut of .5% yesterday, and a somewhat coordinated effort with other international cuts, have helped buoy the dollar against foreign currencies, helped oil futures from spiking, and is helping Bond Prices (overall).

So for now, I recommend floating, as we watch to see how this most recent rate cut is handled in the financial markets.

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