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Strategies & Market Trends : Galapagos Islands

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To: Jorj X Mckie who wrote (37970)4/27/2003 10:31:44 PM
From: sun-tzu  Read Replies (1) of 57110
 
if we are getting a rate cut, that will be a nasty message about the recovery

why would it be a nasty message? rate cuts are considered stimulatory. the problem that the permabulls didn't see, was that many of the earlier rate cuts were performed in the face of a yield curve that was inverted. the most powerful predictor of a recession is of course, an inverted yield curve.

we have no history of a recent, inversion of the yield curve. therefore, i would put forth that perception this time will view a rate cut in a positive manner.
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