MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 26 4:00 PM EST

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To: Benkea who wrote (25041)	9/7/1999 5:35:00 PM
From: Ken98	Read Replies (1) of 99985

And hence the dilemma that the Fed finds itself in today. At some point in the near future the Fed will be put in the position of deciding to defend either (a) the bond market by raising rates because of the inflation that is rapidly embedding itself in the economy (as a result of excess liquidity created by the Fed), or (b) the equity bubble by continuing to inject massive amounts of liquidity into the system. The Fed is trying to straddle the fence like it has for the last several months. My guess is that a decline in the dollar will force the Fed to choose (a) or (b). A sharp rise in the trade deficit numbers will likely be the trigger. Regards, Ken.

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