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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (17237)3/22/2002 12:27:11 PM
From: LLCF  Respond to of 74559
 
<So you are buying the idea that when the FED raises rates this year (and make no mistake they will raise rates) that long term rates will come down?>

Well, who knows for sure... but if LT rates are affected by inflation expectations... then raising rates would dampen that expectation vs leaving or lowering... how much the raise would effect expectations depends on lots of other factors.

That said... if foreigners start selling... I don't think it matters what the fed or any other potential movers of rates does or expect.

DAK



To: GraceZ who wrote (17237)3/22/2002 12:27:57 PM
From: rolatzi  Read Replies (1) | Respond to of 74559
 
Grace, a good question.
It depends on whether the interest rate increase by the Fed is proactive or reactive. So it depends on how long he waits and what the outlook for inflation and the economy is. If inflation begins to take off and the Fed reacts to it, then long term rates will continue to go up. Had AG raised rates at this last meeting, long term rates would have come down.
JMHO,
Ro


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