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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: kendall harmon who wrote (95988)	5/3/2000 11:32:00 PM
From: fvillelli	Read Replies (1) \| Respond to of 120523

The Fed has a number of tools they employ in attempting to control the economy. We have all experienced dramatically the effects of Mr. Greenspans 'comments' about the stock market. Raising rates is only one of a number of the other tools the government uses to control the economy. Last fall with fears of Y2K looming, massive amounts of dollars were released to provide liquidity. Since the First, those funds have been reclaimed. Often conflicting strategies must be implemented for differing reasons. As the Fed attempts to rein in or let out the controls the economy is often subject to whipsaws. These actions add a certain amount of volatility to the markets. That, is our blessing and our curse.

To: kendall harmon who wrote (95988)	5/4/2000 7:05:00 AM
From: Doug Robinson	Read Replies (1) \| Respond to of 120523

Good points, Kendall. Additionally, the feeling that one large increase might send the market up could vanish if the Fed indicates after the meeting that they are very concerned about inflation prospects and wouldn't hesitate to move prior to the next meeting. Such language would keep the market on hold, since no one likes an unannounced rate increase. If AG wants to keep stock appreciation and it's perceived wealth effect from escalating, such a move makes a lot of sense.