How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 510.37

+1.4%

Nov 14 3:59 PM EST

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To: Jean M. Gauthier who wrote (24763)	6/23/1999 5:57:00 PM
From: John F. Dowd	Read Replies (3) of 74651

JMG and ALL: The unnecessary Fed rate hike is already discounted. When you think about raising US interest rates their comes with it a bunch of unintended consequences: 1. Rates go up $ becomes stronger - we import more because we have the strongest currency and inflation is imported. 2. Capital being expensive (relatively) reduces the incentive to expand plant and equipment. Companies resort to overtime and the cost and price of goods go up. 3.Because we have to finance our balance of trade deficit we get further pressure on our capital markets. The only inflation I see is the artificial inflation of the cost of money by the Fed. All other commodities are if anything deflating as of this moment. Raising interest rates under the present conditions is going to be counter productive. The economy is not a one trick pony - many things have to be considered - too many for one guy to mastermind them all. Let the markets take care of themselves. The Fed's job is to protect the currency and the solvency of the banking system. JFD

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