Now gonna nudge rates up by about .25 of a point. Obviously they see the 4th quarter GDP this Friday coming in much stronger than expected . . . "expanding briskly" and the unemployment claims have dropped off sharply as well.
But Waggie, our good friend Jimmie Stockie swears there is no way rates are going up before November! Of course, I did have some trouble following his thorough analysis (or lack thereof).
Speaking of symbolic moves, I have an idea. Since the Fed had previously reduced rates to the ridiculously low current level, it would now be interesting to see rates lowered some more, only this time into negative territory. This way, when you borrow at the bank, it would have to pay you interest. Conversely, when you deposit your savings into a bank, you would pay that bank interest. Absurd? Of course. However, it would make the notion of spending our way to prosperity that much less laughable than it is now. And you will recall that this has been the current administration's mantra for some time. Plus, the entertainment value of living in a Bizarro world should not be dismissed.
http://www.wallstreetfollies.com/archive33.htm <IMG SRC=http://www.wallstreetfollies.com/2002/morepercentagepoints.gif>
A $477 BILLION DOLLAR DEFICIT by the Bush Administration is not going to allow for lower rates. By the way, the Treasury was actually asking around last Friday how market participants would feel about a 20 year T-bond coming out. Can you say more SUPPLY?
Thunderdog: I'm not an economist but I think we'd be vaporized by either deflation or inflation before it got to that point. Though if you DO come across any places that PAY interest on borrowed money let me know... lol, ol