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To: Tradelite who wrote (126832)	10/2/2001 2:16:43 PM
From: GraceZ	Read Replies (3) \| Respond to of 436258

Do you believe rates are going to rise any time soon? As I'm sure you are aware the Fed only controls short term rates. The long term rates are set by the market and are quite high in comparison to the FF rate. This indicates to me that the market is looking for inflation in the future. The long term rates and the real cost of money as represented by the price of gold indicate that there is a danger of rates rising if and when we see any signs of a recovery. This obviously hasn't materialized yet, but if it does, the Fed will have little or no choice but to raise rates. Right now the money the Fed is creating is going into inflating asset prices (ie. real estate) the way it went into stock prices earlier. Loose monetary policy almost always goes into inflating prices. Let's add in a "war" of indeterminent length along with carte blanche government spending and where would you think rates are headed?