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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Zeev Hed who wrote (2765)12/29/2000 7:01:17 AM
From: Henry Volquardsen  Read Replies (2) of 3536
 
agree and disagree.

I agree that it is very unlikely we will get a rate cut before the next meeting. However I'll bet you a nickel grin we get a cut before the March FOMC. I suspect employment will be a lagging indicator this time around and the Fed knows it. With all the difficulty in hiring recently I believe a lot of businesses will hold onto employees as a scarce resource longer than in past downturns. Therefore unemployment will lag. The Fed knows this and will put more emphasis on other factors.

Also one cut does not mean a campaign. One cut would help stabilize confidence and does not mean that much on the margin. The Fed won't start a campaign until they see a meaningful rise in unemployment.

Henry
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