Fed Prepares for Interest Rate Increases

[NNN0LHI]

http://story.news.yahoo.com/news?tmpl=story&cid=509&ncid=749&e=6&u=/ap/20040502/ap_on_bi_ge/fed_interest_rates

WASHINGTON - A replay of 1994? That's one question facing Federal Reserve (news - web sites) policy-makers when they meet Tuesday and try to determine how an economy accustomed to super-low interest rates will react to rising rates.


A decade ago, shock waves from rate increases contributed to financial disasters in Mexico, Orange County, Calif., and elsewhere.


Analysts do not expect that Fed Chairman Alan Greenspan (news - web sites) and his colleagues will start raising rates this week. Many expect the central bank will start preparing the country for higher rates, in large part to avoid the mistakes of a decade ago.


"They want to be very cautious this time around because they want to avoid an outcome like 1994," said David Jones, who has written four books on the Greenspan Fed.

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[candy331]

1. I suppose it could be delayed until after

the November elections and if not the spin on the raise/s will be sickening, nauseating and putrid.

[nagbacalan]

2. Blatently political Fed.

First, we have to see if the April PPI numbers are acceptable enought to release; next, see if the low wage, benefitless, temporary job numbers can provide a good spin to build some market momentum after our big time goosing of the futures market; then, run it by the House of Saud.....

[puerco-bellies]

3. PPI #'s

I trade commodities, and if the PPI numbers are honest they will show a HUGE increase. Raw matierals (Commodities)of every sort have skyrocketed in price over the last 6 months. This has to be evident down the chain, first the PPI (Producers Price Index), then in the CPI (Consumers Price Index), in short it is one of the first signs of inflation.

[54anickel]

5. Commodity prices - Yes, wasn't it rather interesting, the timing of

Wen's announcment of applying the brakes to China right on the heels of Cheney's visit? The industrial metals markets plummeted on that announcement and PMs followed them down. Funny how that all worked out.

[The_Casual_Observer]

4. If you have money in the stock market

Good Luck