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Politics : High Tolerance Plasticity

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To: Terry D who wrote (4321)5/8/2001 2:50:32 PM
From: energyplay   of 23153
 
Bond prices not following Fed -

It's the 1970's all again !

Flared pants.
High oil prices.
Higher unemployment.
Inflation.
Oh, and the stock market did really lousy - especially those hot mutual funds - Like Gerry Tsai's
Ending with a run up in precious metal prices and 20% interest rates ?

I think your author has this correct (who is the author, by the way ? Hays ?)
I think the Fed will want avoid this scenario and will stop cutting rates much sooner than people expect.

However, I will guess that they need to see SOME kind of positive numbers, if only for political reasons , they can point to and say "the xyz is up, so we don't think addtional easing is warranted at this time"

I don't think it will be evidence of inflation - that's already here - but the don't want the overall economy in free fall. They might have to live with the tech part of the economy being in free fall, however.

So may take is that stocks will go up until we get good news ;-)
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