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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread
VTI 334.92+1.5%Nov 10 4:00 PM EST

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To: Justa Werkenstiff who wrote (90)7/6/2000 6:32:35 PM
From: MrGreenJeans  Read Replies (1) of 10065
 
Justa

Big market celebration automatically puts the Fed. in play again.

Could not disagree more with this statement. Without core inflation plus a slowing in the unemployment rate and with a slowdown in the economy the Federal Reserve has a history of letting the markets go where they may. They have not attempted to prick the markets in the past and will let the markets settle at an equilibrium.

Could the wealth effect make the Fed more active? Certainly but core inflation and the unemployment would have to rise and tighten respectively. Remember core inflation once energy prices are stripped out have been creeping up slowly but not significantly.

Put me in the slowdown with no recession camp. Looks to me like the Fed will be on a hold for awhile. (Famous last words I am sure that will come back to haunt me.)
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