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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (32268)	5/15/2001 3:53:33 PM
From: Johnny Canuck	Read Replies (2) \| Respond to of 68426

14:26 ET Fed Policy : To clarify an earlier comment, the Fed statement was bullish in terms of future rate cuts, not in terms of the economy. In fact, the Fed's economic view stands in contrast to the market's. They clearly put little weight on recent consumer data, and appear to believe (as Briefing.com does) that the consumer will be dragging into the mire of falling corporate profitability. They also put little weight on arguments that inflation is a risk or that long-term productivity growth is faltering -- these are bullish indications for future rate cuts. 14:23 ET Fed Policy : The Fed's next meeting concludes on June 27, at which another rate cut is a good bet given our view that the consumer will be the next leg down for the economy. But make one important note: the Fed did not say that they are likely to cut rates again -- they never say that. Policy makers only indicated that the balance of risks lies on the side of excessive economic weakness, not inflation. What they do next is dependent entirely on the economic data from now until Jun 27. 14:18 ET Fed Announcement : The Fed's announcement was very bullish. The Fed removed its comment about "monitoring developments closely" and thus the likelihood of an intermeeting cut. But there was nothing in the announcement that indicated the Fed sees a turn in the economy. Policy makers continued to make the following points: capital spending is declining, there is a negative equity wealth effect, and importantly they expressed continued confidence in the view that productivity growth remains strong and inflation risks remain low. Dow moves from -50 to unchanged and Nasdaq from +6 to +29.