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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 679.68

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Nov 26 4:00 PM EST

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To: donald sew who wrote (17407)	6/15/1999 12:50:00 PM
From: Chip Anderson	Read Replies (1) of 99985

Ed Yardeni's latest take on interest rates: ============================ COMMENT: A year ago, the Fed was biased toward raising the federal funds rate because domestic demand was very strong.. Instead, this rate was lowered by 75 basis points during the Fall of 1998 because of the global financial and economic crisis. Now that the crisis is over, will the Fed take back last year's easing move? I expect a quarter-point hike at the Jun 29-30 meeting and another at the Aug 24 session. But I expect no action at the Oct 5 meeting; then I expect a 50-basis-point cut at the Nov 16 session and a 75-basis-point cut on Dec 21. Obviously, I don't expect that the economy will continue to boom through the end of the year. I also don't expect a rebound in inflation. On the contrary, I expect that two rate hikes and increasing Y2K concerns will trigger a sharp decline in stock prices during September and October, and a weaker economy with lower inflation. This scenario should be bullish for government bonds. =========================== Chip stockcharts.com

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