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Strategies & Market Trends : Tech Stock Options

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To: Gersh Avery who wrote (47261)	7/2/1998 3:44:00 PM
From: Lee	Read Replies (2) of 58727

Hi Gersh, ..Re:<<Fed Funds>> Treasury added reserves today because the funds rate was 5.625 instead of target 5.5%. And the Fed warned banks not to relax lending and in fact to be more cautious. Now I don't understand how all this affects the market. I do understand that the Fed tries to maintain 5.5% and that a holiday weekend puts strains on banks for cash but I don't understand what's wrong with 5.625% for the weekend. I guess what I'm saying is that I don't understand. <VBG> Can't be more clear than that! marketgauge.com Also, it's not apparent to me what affect the funds rate, and therefore the addition or removal of liquidity, has on the S&P from the chart but I will print it out and try to understand. Looks like in the '94 and '95 time frame when Fed Funds rate of change was high, the market just went sideways. Is that what you see? Thanks for any explanation Lee

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