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Strategies & Market Trends : John Pitera's Market Laboratory
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To: friverola who wrote (5455)2/7/2002 3:45:12 PM
From: John Pitera   of 33421
 
Hi Friverola, I like how the look of the FXstreet.com site, it continues to get better.

Very interesting thoughts from Bill Gross of PIMCO, a hike in the FED Funds rate could actually lower the longer end of the yield curve. The 10 to 30 year portion of the curve.
Also along Mr. Gross's line of thought, a rise in the FED Funds rate would also mute the inflationary embers, if they exist, in this recent move in Gold to $300 and the potential other Hard asset allocation shifts which could be occurring at the margin.

One textbook concept is that the longer end of the yield curve starts to rise when the credit market believes that an economic recovery is coming, since a recovering and expanding economy should create cost push inflation.

In theory, it could also increase desire for companies to borrow to expand plant and equipment thus raising borrowing costs.

John
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