S&P Sees Fed's Benchmark Rate At 4.5% By End Of Q1 2008

I'm posting this for a reason. It's not that I believe they are correct, but any financial or economic body that says the fed will cut in September is a boost to our GBP/JPY trade. Goldman Sachs said the same thing the other day and that contributed to the start of the turnaround.

8/22/2007 10:46:41 PM Standard & Poor's said Wednesday that it expects the Federal Reserve to cut its key rate to 5.00% at its September 18 meeting. Furthermore, the firm predicted a rate of 4.5% by the end of the first quarter of 2008.The prediction comes after the Fed cut the discount rate 50 bps to 5.75 percent and extended the loan period window to 30 days.

Standard & Poor's said this move was “neither symbolic nor a one-time event.”According to the report, Wall Street generally has a positive reaction when new rate-cutting programs are initiated. The Fed has started a rate-cutting program 11 times since 1945. Stock prices fell through the first six months on four of those occasions but rebounded to gain 10 times over a 12-month period.S&P also acknowledged the recent gains of the U.S. dollar but called them “trade-weighted.” The firm suggests that the gains will not last, as fundamentals suggest to it a weaker greenback over the longer term.