Goldman Sachs now
expect the Refi rate to "trough at 2.0% by the end of Q1, with a
possibility of an unprecedented 1-handle during the spring of 2009",
writes Erik Nielson at GS. Goldman's now see a 50bps rate cut in
November, another 50bps in December, followed by 25bp in each month
during Q1 -- "but, needless to say, the exact path down to 2% is
somewhat uncertain, but it'll be fast and furious as the ECB plays its
most obvious remaining card in the fight against the financial tsunami.
The exact timing of the cuts will largely dependent on market events
between now and spring"...."If Euroland consumers were to continue
boosting their savings into the spring and summer of 2009, preventing
private consumption from picking up (if ever so moderately), then the
ECB might well decide to go below 2% for some time", says GS.