Fed rate cut may be heavy-handed fuel inflation.

<P> Federal Reserve cut interest rates 0.75 PCT, to relieve financial pressure on the market and the cost of borrowing, but many economists fear that this decision probably will lead to inflation. ."Washington Post" 19, warned that if the Fed's estimate is wrong, may allow the economy to get too much money to invest also ignited on the goods, housing and capital spending excess demand, thereby pushing up prices. .</ P> <P> It http://finance. Hearing, by pushing up prices, it is tantamount to every American, took out his wallet to help rescue the financial industry. .Price increase equivalent to the decline in house prices slowed, but inflation will eat the real value of housing. .</ P> <P> Rogoff of Harvard University economics professor, said the good news is the interest rate cut will remove the pressure on housing prices, the bad news is that when the end of this mess, should be removed from the system of inflation .is very painful. .</ P> <P> commodity market in the 18 is clear that the threat of inflation. .Has been record high corn and copper because it is expected the Fed to cut interest rates and rising oil prices rose in New York more than three U.S. dollars per barrel, to $ 109.42. .Since last Friday, gold beyond 1000 to the $ 1,001 mark, the yen rose against the dollar actually broke 100, inflation as if into the digital age. .</ P> <P> Fed apparently felt, regardless of how much to cut interest rates to inflation costs, the deal is still worth it. .Because the dollar interest rate cuts slack to help boost exports and maintain competitiveness of U.S. companies, but also to obtain support for the economy. .</ P> <P> to Caterpillar's case, the engine manufacturing, construction and mining equipment company, last year's exports to jump by 20%. .Owens, the company's chief executive said last week that many emerging countries such as Brazil, for a substantial increase in demand for machinery and equipment, the company created a handsome profit. .</ P> <P> but in the Cleveland Federal Reserve Bank President Hoskins eyes, in order to boost exports and cut interest rates will undoubtedly harm than good. .Last week he was in the "Forbes" magazine article that the current economic situation compared with the 1970s. .</ P> <P> Hoskins wrote: "In order to maintain economic growth while the Fed since the move failed attempts to give up the one thing it can really control, it is a long-term price increases. To create more .U.S. dollar will not increase the wealth of the United States, or to increase worker productivity. " .</ P> <P> 1971 U.S. President Richard Nixon in order to curb inflation, the implementation of price and wage controls unprecedented action, when the U.S. CPI 4.6%, and with the United States actually is not far off now. .Continue serving as president in 1974, Ford (Gerald Ford), face greater inflation crisis, CPI has soared to 10.9%. .</ P> <P> But other economists said the Fed to stabilize the financial system, may not cut rates. .Economics textbooks have set a record box office said Harvard professor of economics at Comanche, Bear Stearns stock fell from $ 2 per share, $ 100, not a textbook to be taught how to deal with a collapse of investment banks. .Some analysts also said that in order to avoid the expansion of subprime mortgage crisis, the Fed must cut interest rates, because many households in mortgages this year and will face the end of the prime rate, the stage must be re-adjusted interest rate, if you can not help them .to lower interest rates, there will be more people lose their houses. .</ P> <P> Information Service under the loan, but the statistics show that banks cut mortgage interest rates, the pace, the Federal Reserve cut interest rates totally can not keep up the rate. .Last September, that is, when the Fed started to cut interest rates on 30-year fixed-rate mortgage averaged 6.34%, to 5.48% in January this year turned into last week and climbed to 6.13%. .</ P> <P> some analysts fear the situation may be the sign of the Fed's monetary policy failure. ."SmartMoney" writer Donald Luskin reminds investors, gold, oil, commodities prices have reached a new stage, the situation will become more serious inflation. .</ P> <P> Related: Federal Reserve central bankers to cut interest rates so that the first big </ P> <P> the Federal Reserve cut interest rates in China mean? </ P> <P> Keywords: inflation, the Fed loans .monetary policy </ P>.