MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 14 4:00 PM EST

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To: John who wrote (72872)	3/20/2001 4:26:31 PM
From: WTSherman	Read Replies (3) of 99985

I think that today's rate cut was a clear message to the market that the Fed is not going to let Fed interest rates be too closely tied to stock market(s) performance. Its a deadly trap that AG has tried to avoid and today was his chance to send the clear signal that his job is not to try to prop up the markets. That said, there is a clear point at which market weakness will have a crushing effect on the economy, but, we aren't there, yet. You also have to consider the fact that the Fed has traditionally tried to make sure that it had some weapons left if things got really bad. Dropping rates too low, too fast isn't the greatest idea and certainly not a good policy when unemployment is still in the 4's.

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