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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: greg welch who wrote (5852)	10/16/1998 9:51:00 AM
From: JZGalt	Read Replies (1) of 18928

Greg, The FED did lower rates, but it was correcting their habit of being overly tight. By loosening up now, they preemptively prevent more leveraged positions from going down the drain vs. cleaning up afterwards. Remember the enormous number of things that are now tied directly or indirectly toward the federal reserve rate. Mortgage rates, credit card rates, etc. Christmas came early this year for those folks holding debt. This puts money in peoples pockets and stems the tendency toward not spending that was starting to occur. This lowering signifies a huge change in thinking. It also allows Japan to act more proactively than it could otherwise. ---- Dave

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