Fed raises rates again

[VoyT]

WASHINGTON - Federal Reserve policymakers raised a key interest rate Thursday, declaring the economy is on firm footing despite gyrating energy prices. The central bank signaled that borrowing costs would head even higher this year.
Chairman Alan Greenspan and his colleagues boosted the federal funds rate by one-quarter of percentage point to 3.25 percent. It was the ninth such increase since the Fed began to tighten credit in June 2004 in an effort to keep inflation under control.

 

[JPatrick]

Was there any doubt?

 

[Michael]

I was watching Alan on C-Span a bit back. He said that he didn't know how high he would raise rates. He just raises them until the economy is in balance. He couldn't quantify the word "balance", but he would know it when he saw it.

 

[cute fuzzy bunny]

Two more times. Then nothing for six to twelve months. Then frantic backpeddling.

"Moe, Larry...its a waterfall!!! Woob woob woob woob...nyahhhhhh...ahhhhhhah...

 

[Mr._johngalt]

I was watching Alan on C-Span a bit back.  He said that he didn't know how high he would raise rates.  He just raises them until the economy is in balance.  He couldn't quantify the word "balance", but he would know it when he saw it.

Reminds me of stock-picking with chimps and a dart board

JG

 

[Zipper]

I remember back around~ December 1999 everybody but the fed realized that a cut was essential.

I think up to that point, that was their biggest mistake.

They fell way behind the curve and the crash was inevitable.

They soon realized they had gone too far, and in 2000 started to drop rates like a stone.

If they could have done things differently, I'm sure they realize they should have reacted that December.

The rest is history!

I think we are getting close to a second boo-boo.

But when the bottom drops out, like December 1999, it's too late.

 

[Michael]

That drop wasn't solely because of the fed's rate. A big drop in tech was inevitable, since managers had pushed much of their tech spending into the years leading up to Y2K. The double whammy of not needing upgrades for a few more years, plus the feelings of betrayal when the Y2K bug proved to be a myth, led to much less corporate tech spending for a while.

Then there was the strange government actions that led to US broadband falling behind nations such as Korea, and nascent dot coms imploded along with corporate spending.