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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Henry Volquardsen who started this subject	12/27/2000 5:16:34 AM
From: friverola	of 3536

Fed "erred" by not cutting rates on December 19 (Bloomberg News) fxstreet.com The Federal Reserve's decision not to lower interest rates last week was a mistake, Bear Stearns & Co. economists said. ``The Federal Open Market Committee erred at its Dec. 19 meeting when it issued a warning on economic growth but failed to lower interest rates,'' the economists said in a research note dated today. The Fed will probably lower rates in early January, they said. The researchers, led by former Federal Reserve Board member Wayne Angell, said the Fed didn't expect an almost $1 trillion decline in stock market capitalization following its meeting, where it abandoned its stance tilted toward higher rates in favor of one that suggests lower rates are in the offing. The Nasdaq Composite Index fell 4.3 percent on the day of the Fed meeting, and 7.1 percent the day after. Fed Chairman Alan Greenspan on Dec. 5 said the central bank would remain alert to the possibility that declining asset values could ``signal or precipitate an excessive softening'' in consumer spending, posing a risk to the nation's record expansion. Those remarks sent stocks higher that day... fxstreet.com

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