Silicon Investor (SI) -- The First Internet Community

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.

Gold/Mining/Energy : Daytrading Canadian stocks in Realtime -- Ignore unavailable to you. Want to Upgrade?

To: New Economy who wrote (36973)	5/16/2000 2:23:00 PM
From: Sultan	Read Replies (1) \| Respond to of 62348

New Economy.. To live upto your name, you should get a wireless internet and contribute to the tech sector but to answer your question.. 1/2 point hike and Fed sees future inflation risk so I guess more tightening to come...

To: New Economy who wrote (36973)	5/16/2000 5:06:00 PM
From: gonzalez39	Read Replies (1) \| Respond to of 62348

The Federal Reserve raised interest rates aggressively Tuesday to stop the booming economy from overheating and suggested it was intent on increasing borrowing costs further in the months ahead. In a statement, the Fed said its rate-setting Federal Open Market Committee voted to increase the federal funds overnight bank lending rate by half-a-percentage point to 6.5 percent, its highest level in almost a decade. To amplify its move, the Fed also raised the more symbolic discount rate by the same amount to 6.0 percent. Explaining its decision, the Fed said: ''Increases in demand have remained in excess of even the rapid pace of productivity-driven gains in potential supply, exerting continued pressure on resources. The Committee is concerned that this disparity in the growth of demand and potential supply will continue, which could foster inflationary imbalances that would undermine the economy's outstanding performance.'' Using its standard language to suggest where it saw interest rates moving next, the central bank warned that the risks to the economy came from higher inflation. The Fed's move followed five successive quarter-point increases in the bellwether fed funds rate since June 1999, which had done little in slowing the blockbuster U.S. economy to a more manageable and potentially less inflationary rate. In an immediate reaction, stocks fell slightly and bond prices firmed. The rate decision came after the government earlier on Tuesday said the key Consumer Price Index held steady in April as energy and transportation costs fell, signaling inflation remains tame even in the tenth year of an unbroken expansion. The unchanged U.S. Consumer Price Index in April compared to a 0.7 percent jump in March. The core CPI -- which strips out volatile food and energy components and is closely tracked by the Fed -- rose 0.2 percent after March's 0.4 percent gain. But Fed policymakers have long worried that exuberant U.S. economic growth and falling unemployment rates will put so much pressure on the economy that inflation pressures will tick up before long unless borrowing costs continue to rise. Tuesday's move will increase the cost of borrowing across the U.S. economy and far beyond its borders, increasing rates on everything from mortgages to car loans. Fed policymakers next meet to discuss interest rates on June 27-28.