The Fed does not meet the "cut addiction".

<P>: Http://finance. Information on the market, cut like a drug. .They can be exciting, but it can also lead to dependency. .Like drug addicts, the market requires increasing doses to achieve the same effect. .</ P> <P> This is the Federal Reserve (Fed) delineation of the market may have symptoms. .Today, the Federal Reserve will meet to decide monetary policy. .This year in September when it cut interest rates by 50 basis points, he had caused the market to soar. .However, the October rate cut only 25 basis points, resulting in relapse markets: U.S. stocks fell, the credit crunch again. .</ P> <P> Fed officials acknowledged that the liquidity crunch has intensified, traders speculated would be a recession, so the market that the Fed will again cut interest rates 50 basis points. .This led to the recent rise. .However, this speculation is getting cool: futures price that the market is expected to cut interest rates by 25 basis points rather than 50 basis points. .</ P> <P> Why? .Central banks last week, it sounds very tough. .Bank of England (Bank of England) lowered interest rates, but issued a warning of inflation. .Inaction of the European Central Bank (European Central Bank) sounds more like to hike, not cut interest rates. .</ P> <P> However, the most important employment data. .Federal Reserve ordered to achieve full employment, therefore, poor employment data for rate cut to provide a good excuse. .</ P> <P> last Friday's nonfarm payrolls data can not provide this excuse. .Employment increased by 9.4 million, higher than previously forecast 8 million. .This data showed the economy was not sliding into recession interval. .Family rather than by investigating household surveys compiled survey companies even showed a slight rise in employment growth also. .</ P> <P> the Fed can make a diagnosis based on the data it? .Corporate tax provision to track the company warned that this employment growth seems to have stopped. .</ P> <P> However, the Fed does not want to induce in the market, "addicted culture," do not want to show their fear of recession. .It appears that the Fed is most likely issued the prescription: reduce the federal funds rate by 25 basis points, and may be more significant reduction in their lending to the banks based on the higher discount rate. .</ P>.