You are not signed in. (Sign In)

After seventeen increases, the Fed stopped raising rates, choosing to emphasize the weaknesses showing up in the economy rather than increasing inflation. Since monetary policy takes a long time to work through the economy, the Fed will get both slower growth and higher inflation over the next twelve months. In choosing to stop raising rates, the Fed has backed off its inflation fight, and has caused an economic slowdown that will last through 2007. In other words, it chose that dread middle ground of cutting the baby in half. We will be the worse for it.

Print this

Delicious Digg Reddit Magnoliacom Newsvine Furl Facebook Google Yahoo Technorati Icerocket

August 9, 2007 by John Tuccillo
even though we get the worse of it, it doesn't mean that we can just back off. this is the industry that we chose and there's always the ups and downs in every industry. we just have to work harder to survive this time. and maybe when it goes back up, we're still here working.
reply
August 9, 2007 by John Tuccillo
With the seating of the new fed chairman and the long shadow of Greenspan cast over the new kid, there was a need to establish a break and new direction. It's all about the need for a new emphasis, credited to the new Chairman, whether needed or not; never mind the unpleasantness of it all and its obvious negative impact on the economy. Just exactly what is it we are trying to control with these rate increases that will destroy much of the economic build-up in the real estate industry and replace it with increased inventories and more foreclosures. How do we say, "thanks, for nothing?"
reply
August 9, 2007 by John Tuccillo
That is a great view point for those that are established and have little or no debt. But for struggling businesses that used debt to expand the rise in interest rates has crippled many business, who cannot raise prices to offset the higher debt-servicing cost or higher energy costs. Capital intensive businesses are going to be the first to shut down if the cost of capital continues to increase. It always surprises me to listen to the CPI announcements that reflect inflation less food and energy ... still have to eat and drive.
reply
August 9, 2007 by John Tuccillo
New managers in all fields and of all backgrounds use the middle ground mire in their first battles. Only cannon fodder are harmed, you know...consumers, business, industry...those without the monthly eagle handouts... Yes, maam, we will be the worse for it...so now we out smart, our work and flex our minds to beat it.
reply

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <h1> <h2> <h3> <h4> <h5> <h6> <em> <strong> <code> <del> <blockquote> <q> <sub> <p> <br> <ul> <ol> <li> <dl> <dt> <dd> <a> <b> <u> <i> <sup> <img> <object> <param> <embed>

More information about formatting options

CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.