Inflation and recession knocking on Dollar's door!

With the 'sub prime' mess barely over,now we have the news that lesser and lesser houses are being constructed. That is not all, besides the fact that lesser houses are being built, this is the lowest level that the construction of new homes fell to. With the Fed being proactive so as to curtail any inflation and recession fears, most of the economists expect the Fed's to cut the interest rates once again. But cutting the interest rates too much can also have a sort of a negative impact on the whole economy, so the Fed's will not jump the gun here. Instead, they will wait for further data before taking any decisive action as regards the interest rate cuts.
This may not be a good time for the U.S dollar with consumer prices as well as energy prices soaring to all new heights. We should see a rate cut within four weeks time if the current trend of negative fiscal data holds.
With both Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson warning this week that the housing downturn was likely to persist longer than had been expected, it is going to take some time for the Economy to recover to its full strength!

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