re: The big question in my mind is when will Greenspan start to raise rates?
In his speeches, he has said (consistently, and as clearly as he says anything), that he is still more worried about recession (the dreaded W-shaped downturn), than he is about inflation. And, the pattern is, the Fed never starts raising rates, until unemployment stop rising. And unemployment rises, in most recoveries, for 6-9 months after GDP growth troughs. So it's unlikely we get any rate increases in 2002. A small possibility of a small rate increase (1/4%, no more) in 4Q02.
With inflation nil, and productivity increasing rapidly, and unemployment increasing, the chance of a Fed rate hike is nil. No need to worry, till those conditions change. |
