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To: mishedlo who wrote (67794)	2/14/2001 7:23:08 PM
From: robnhood	Read Replies (1) \| Respond to of 436258

I'm not sure , but I think that they target the Fed Funds rate... If it is too high , they buy bonds, if it is too low they sell bonds.

To: mishedlo who wrote (67794)	2/14/2001 10:52:46 PM
From: John Madarasz	Respond to of 436258

Is it as simple as liquidity is drying up? It's less money in the system as it were, but given the incredible amounts of liquidity pumped in this year this is nothing ...yet. I think it will take a concerted drain from the fed to have any lasting effect, and I doubt that will happen. I think you should take a look at this site, stls.frb.org and I'll defer to Heinz on this subject as I know he can explain much better than me exactly how liquidity drains effect the system, and the market. There are lots of charts which show corresponding increases and decreases in market value as money supply rises and falls respectively...I just don't have them available without a fair amount of digging. It's a good thing to watch though as it can be a precursor of sorts towards market direction...one of many. Best Regards