'Financial Times': European Markets Factoring In 'At Least A 50-Point Cut, Maybe 75' At Fed Meeting Today
DEBORAH MARCHINI, CNN ANCHOR: Well, European markets are higher this morning by better than 1 percentage point. Are they merely playing catch-up to yesterday's rally on Wall Street, or are they saying something about what they expect from the Federal Reserve? Here to answer that question is Hugh Carnegy, world news editor of the "Financial Times" in London. And, Hugh, how important is the Fed's action overseas?</s>HUGH CARNEGY, WORLD NEWS EDITOR, "FINANCIAL TIMES": Good morning. Well, of course, all eyes over here are on the Fed as well this afternoon. I think that rise this morning just followed Wall Street's close last night. And people are pretty much in a holding path and now waiting to see what happens this evening. Rather as it is over there, people are factoring in at least a 50-point cut, maybe 75, to the extent that 50 might be seen as a bit of a disappointment here. So, there's very much wait-and-see mode at the moment.</s>MARCHINI: All right. Would the markets there sell off also if we only got a 1/2-percentage point cut from the Fed here?</s>CARNEGY: I think there are certainly some people that think that if we only got -- only got a 50-percent -- a 50 -- sorry -- a 50-point cut that the market could go down. But it will track Wall Street. It'll wait and see what Wall Street does and follow it almost certainly. The interesting thing here is I think if you kind of look at the broader context of the macroeconomy, the European economy as we've been saying for some weeks now is expected to perform better than the American economy this year, it would seem. And certainly the European Central Bank has not followed the Fed in all this aggressive cutting that we've seen over the last few weeks on your side of the pond. But there is, I think, a little bit of disquiet over here that maybe there's a bit of complacency at the political end, at the central bank level in Europe, that Europe, although it doesn't export as much to the American economy as some people sometimes think, I think the whole confidence issue is an important one. And there are certainly some people feel a little worried that the European economy may not prove to be quite as robust if there is a serious downturn in the U.S. as some people have been saying.</s>MARCHINI: Especially when you consider that it's not just the U.S. but Japan has got some financial problem as well. Hugh Carnegy of the "Financial Times," thanks so much.