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Strategies & Market Trends : Three Amigos Stock Thread

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To: James Strauss who wrote (15955)6/24/1999 9:26:00 AM
From: j g cordes  Read Replies (1) of 29382
 
My comment to the Fed.. Its a nasty cycle.. If consumers feel rates/prices are going up they will buy more now. The perception of rate hikes initially increases spending... through every sucessive rate increase until the cost of business itself becomes too high, then activity implodes.

Fed watchers will point to increased spending as a sign of an overheated economy, when in fact they are often the cause.

It would be interesting to see what would happen if the Fed voted to lean towards easing! Demand would back off because the perception of buying now, before prices increase, would subside. With consumer demand not being artificially squeezed, productivity, competition and greater efficiencies are free to exercise the best management of inflation.

Jim
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