Thursday, May 29, 2008

A few Ramdon Thoughts

Yesterday we had a Traders meeting at my office. It was surprisingly depressing. Talk of inflation, stagflation, Bank failures and this was the positive stuff! Getting through all of that Doom and Gloom the general message took from the meeting was:

1. Higher rates globally.
2. Weaker dollar
3. Higher Crude
4. Higher Inflation
5. The Fed on hold....for a considerable amount of time. With a steepening yield curve to combat inflation this would be the best of both worlds for the Fed. A steep yield curve allows the banks to recapitalize (maybe a slow process) and the higher long term rates can help combat inflation.

Another thought today was that the Fed's view of the economy is that the U.S. slowdown is deeper then they will admit. This deep(er) recession will cause a global slowdown which in turn will lead to lower commodity prices.

Any thought....let me know.

Good Luck and Good Currency Trading



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