Wall Street Expects Fed To Cut Interest Rates: Stocks Set To Rise
By: Roy | September 16, 2007
An interest rate cut is what many investors on Wall Street are expecting Ben Bernanke and the Federal Reserve to do on Tuesday.
Due to the global credit crunch and the possibility of a major recession in the US, the Fed is under tremendous pressure to cut interest rates to offer some relief to the entire financial markets, but especially to home loan and mortgage stocks, which have been suffering greatly.
A cut in interest rates will spur the US stock market into a rally, and many think we could see significant rises in the DOW, NASDAQ and S&P 500.
However, gold analyst Sam Kirtley of The Gold Prices Newsletter thinks that gold and gold stocks will benefit the most from a interest rate cut.
“The US dollar is already below is key support at 80 on the US dollar index. A cut in interest rate would send the US dollar significantly lower with no forseeable technical support. This collapse in the US dollar will send gold prices soaring and gold stocks will soar either further.”
Do you think Ben Bernanke and the Fed will cut interest rates?
Where should investors be positioned to best take advantage of a possible rate cut?
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