GOIH Capital Markets: Fed's FOMC Meeting

Today the Fed's FOMC meets to consider the stance on interest rates. Our models have been recalibrated and predict that the Fed will cut the rates by 25 basis points.
GS is on the rise opening at $241 and currently trading at $245.

Our models indicate the housing market will continue being a drag on the economy. Actually Target (TGT) and Wal-Mart (WMT) are new variable we have extrapolated and applied a Kalman filter to the data set and determined that BAC, TGT and WMT are accurate predictors of the consumer sentiment in the economy.

Our models show that California, Ohio are already in a recession with no relief in sight due to the slow down in the building market. Because of the multiplier effect housing has a disproportionate effect on the economy.

A recent article in the Atlanta Business Chronicle stated that 16 of the largest 50 businesses in Metro Atlanta were in the building trades. That is 32% of the businesses are associated with building and construction. Clearly if building slows in Atlanta, the economy will be severely affected.

Our models indicate that because building, residential and commercial, are so vital to the economy we have conducted a study where the results indicted that the building sector must go on regardless of the salability of the finished product.

Oil is up to $94.00 per barrel indicating that the dollars will weaken implying that the Fed will cut rates. As we have reported here in earlier posts, is that as the dollar weakens, import prices, i.e., oil, increases creating inflation in the U.S.

Because of the inflation threat, the Fed can lower interest rates only so far before inflation overtakes any benefits of the low interest rates.

Global Interest Rate Models:

We are developing a model where we will be able to accurately predict global interest rate policies and make accurate determination of the timing of the policies and take advantage of the policy forecasts.