December 19, 2004

SO WHY IS THE FED RAISING RATES?:

U.S. CPI rises 0.2% in November (Corbett B. Daly, Dec. 17, 2004, CBS MarketWatch)

The so-called core CPI, which excludes volatile food and energy costs, also rose 0.2 percent, matching October's increase.

Posted by Orrin Judd at December 19, 2004 10:15 AM
Comments

Why raise rates? Because they fear a replay of '87, a crash caused when foreign investors got spooked out of the us mkts by a crashing dollar.

The USD will prob continue its current slide, but it can't avoid an '87 repeat if the decline is too obvious or too consistent. It needs at least a show of support from time to time, and the concomitant rallies that go with that.

Posted by: ras at December 20, 2004 3:15 AM

ras:

Nothing followed from the "crash" of '87.

Posted by: oj at December 20, 2004 8:04 AM
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