JDN...RE: "...companies to raise capital..."
I would think that some of the small businesses, of which
you wrote, might find it more difficult to borrow in a
higher interest rate environment.
I believe I understand the objective that AG has in
regards to raising interest rates.....however....
The economy (and market) are extremely dynamic and
it can therefore be folly to apply a strategy designed
for a static environment, by applying an older strategy.
I question whether the economic indicators, from which decisions are made, are still as valid today as much as in the past.
(They might again someday ... "reverting to the mean")
Your points 1-3 also echo my sentiments.
The repatriation of foreign money (rising foreign economies
provide alternative investing possibilities) and the
reduction of domestic liquidity also add to this situation.
Oil prices, due to long term contracts at lower prices, have
not had the full affect on the economy, yet.
All this leads to the idea that there should be a "wait
and see" approach before considering the next rate move.
Maybe there is a sentiment that it will become difficult
to slow the economy in the second half of 2000 (election
year) and therefore, the tone must be set now. ?????
Loki |
