Waiting for the big Kahuna Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Waiting for the big Kahuna

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: FJV who wrote (17285)	4/25/1998 1:40:00 PM
From: Temple Williams	Read Replies (1) of 94695

Fed tightening confirmed? Since a lot of people equate the market dropping like a stone with higher rates from the Fed, it's important to note that the Fed has always (in the past 3 decades) tightened whenever financial flows grew faster than fed fund rates. There's a great article in Barron's (04/27/98 issue) on this by Joseph Carson. In February, for the 6th time in 40 years, financial flows grew faster than fed fund rates. Historically, the Fed has tightened within 160-170 days from the crossover. That computes to a July rate hike. But we have, in the Big Green Machine, a "pre-emptive" strike force. So maybe the tightening occurs sooner. Or maybe ... and this is my favorite scenario ... the market thinks the tightening will come in May, tanks a bit (now), gets placated on "no tightening" by Fed pronouncements, recovers (in May) to all-time highs ... and then ... yep ... the Fed tightens (later rather than earlier) and the market blows lunch. Anyway ... the point is that tightening is almost a "sure bet" at this stage ... not "if" but "when" ... and the market probably won't love it a whole lot. My free EWave site is at: skansearch.com

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next