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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?


To: Sam who wrote (1103)4/27/2001 9:04:12 PM
From: MrGreenJeans  Read Replies (2) | Respond to of 10065
 
Sam

My guess is that a steady 2-3% real growth would make AG a happy man. Especially if inflation remains 2-3% or lower. He will get edgey if growth pops above 3%. Will brake if it goes to 3.5, IMHO. But growth over 2% will also mean that rates likely won't go down.

This is not 100% correct. I believe the Fed had this conversation some months ago. Growth in and of itself without the inclusion of productivity numbers means little. That is if growth and productivity are both increasing the Fed is comfortable with 3.5% to 4.5% growth or more if it is non-inflationary. The Fed watches growth and productivity hand in hand.

Your statement about growth being over 2% and rates not decreasing is incorrect. We have 2% growth in Q1 and rates will be cut once again May 15th.