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Strategies & Market Trends : Tech Stock Options
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To: Investor2 who wrote (57819)11/19/1998 6:11:00 PM
From: donald sew  Read Replies (2) of 58727
 
Investor,

>>>>>>>>More imports => slowdown in domestic manufacturing => slower economy =>Fed easing to prevent recession => lower interest rates. What am I missing? <<<<<<<<<

Im no expert here, and did not fully understand the process.

However, FED easing is a reaction not part of the natural process, so lets say that SIEDMAN is right and rates rises to 6.00%, then the FED eases. Or the FED keeps on easing since rates are rising and continue to rise. In other words, the FED eases but the long term rates remain the same, as it basicly did during this weeks cut.

I realise that the FED cuts were on the short-term; however the long term rates are the ones that effect the stock market, and they basicly remained the same.

Im really not trying to make a point, but just trying to better understand it - it really gets confusing. If you or anyone can better shed some light on this issue.

Seeya
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