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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (1334)3/5/2004 4:16:01 PM
From: KyrosL  Read Replies (1) of 116555
 
Reducing short term rates to all time lows did not help the economy much. Why do you think increasing them will hurt it so drastically?

It's low LONG TERM rates that are fueling the refi boom and the consumer spending it feeds. A modest hike in short term rates may even result in even lower long term rates. Plus, higher short rates will kill the carry trade and deflate some of the financial bubbles going. Roach may have a point.
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