Fed’s Liquidity Plan- Months to take effect
Like every fed move in the past, the effects of their decisions takes months on end to affect the consumer market. Their latest decision will not be any different. Anlaysts expect that the Fed’s decision to improve money avaliability in the market and cutting the Fed Funds rate should help improve the consumer market in the long run. But a essential element is still being assumed. That element is that banks would ease restrictions due to these steps by the Fed thereby and will make it easier to lend to individuals and businesses.
In my opinion, I believe that these steps will improve the lending market but I still feel that the lenders are going to be scared to openly lend to consumers as they had done in the past. This will in turn affect various markets such as housing, auto, and other big ticket item industries as it will not show the gains as had been the case in the previous terms.
The damage on the markets has also really hampered consumer confidence and this will need to be amended along with the banks openess to lend money before any real improvements in the markets will be visible
Your friend,
AD
