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Politics : Ask Michael Burke

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To: Mike M2 who wrote (88251)1/11/2001 8:49:16 PM
From: Shane M  Read Replies (2) of 132070
 
Mike,

Many here often seem dissappointed when fed cuts fuel the market - basically saying the rate cuts lead to asset inflation in the form of stock market prices. I understand that, however in this case the rate cut didn't fuel the market (except for a day or two which was quickly given back). Is this not the preferred response to a rate cut, however? Greenspan would like to be able to cut rates without sending stocks through the roof and that's what he got this time. The lower rates will be able to stimulate demand in the real economy rather than the market.

Shane
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