April 19, 2006

HAVEN'T WE DONE ENOUGH DAMAGE:

Rate news sparks rally (ADAM GELLER, April 19, 2006, Chicago Sun-Times)

Stocks soared Tuesday on news that Federal Reserve policymakers believed their run of interest rate increases probably is nearing an end, propelling the Dow Jones industrials up nearly 195 points.

The report helped offset the effects of oil prices that passed $71 a barrel.

Wall Street was already climbing in mid-afternoon when the Fed released minutes of the Federal Open Market Committee's March 27-28 meeting that showed most of the panel's members "thought that the end of the tightening process was likely to be near, and some expressed concerns about the dangers of tightening too much, given the lags in the effects of policy."


That's what Chairman Bernanke is there for.

Posted by Orrin Judd at April 19, 2006 9:11 AM
Comments

It didn't take Bernanke to decide that. Every economist knows that inverting the yield curve is a bad idea, and it's nearly inverted now. They've maxed out short-term interest rates. The same conclusion would have been reached with a Fed full of inflation hawks.

Posted by: pj at April 19, 2006 10:06 AM

No, it hasn't. Greenspan caused two slowdowns fighting a non-existent inflation and would have done it again now.

Posted by: oj at April 19, 2006 10:10 AM

A lot of people see high commodity prices (oil, gold, silver, some foodstuffs) and see inflation. If some of them work at the Fed, well....

Posted by: jim hamlen at April 19, 2006 10:48 AM
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