<font color=green>The Post--John Berry's "Basis Points"
washingtonpost.com
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Rearranged for emphasis & ease of reading.
>>>BASIS POINTS
By Basis Points
Sunday, February 11, 2001; Page H03
The same sort of anecdotal evidence that caused the Federal Reserve to cut its target for overnight interest rates by 50 basis points on Jan. 3 has turned from seriously gloomy to at least slightly positive, according to a number of Fed officials. Both anecdotes and hard economic data figured in the decision to trim another 50 basis points at the end of the month.
The key points seem to be that:
... MANUFACTURING, the hardest-hit sector, appears to HAVE STABILIZED or has begun to REGAIN A BIT OF LOST GROUND,
... while retail sales improved modestly after an extremely weak year-end.
Fed Chairman Alan Greenspan will undoubtedly discuss all this Tuesday when he gives his semiannual report on monetary policy to the Senate Banking Committee.
Analysts expect him to say there are still no signs that the economy is spiraling downward into a recession, though it is too early to declare the danger over.
Meanwhile, investors remain convinced further rate cuts will come in time.
...At the moment, with the better anecdotes and far better tone to the bond market,
... that time looks as if it WON'T be before the Fed's next regular policymaking session next month.
Tomorrow, Treasury will sell $11 billion in three-month bills and $10 billion in six-month bills.
In when-issued trading Friday, the bills yielded 5.02 percent and 4.90 percent, respectively.
-- John M. Berry
© 2001 The Washington Post Company <<< |
