Posts filed under “Fixed Income/Interest Rates”

Beware Periods of Crisis Post Fed

More views on when the Fed stops, via WSJ’s MarketBeat:

"David Rosenberg, chief North American economist at Merrill Lynch, goes one point
further. He said in an interview that not only do markets display a lackluster
performance, but often periods of crisis come shortly after the Fed goes on
hold. "If we take a look in the past Fed pauses, they’re the periods the
arteries tend to harden and financial strains come in," he said.

The market plunged in October 1987,
but the Federal Reserve was on hold by early September, he said. "It wasn’t a
case where the Fed was tightening on the 16th and the market crashed on the
19th," he said.
 
In 2000, strains started to show in the technology sector,
but the Nasdaq Composite was virtually flat on the year in mid-2000. The Fed had
ended its tightening campaign (six increases in 11 months) in May; the Nasdaq
lost more than 40% in the second half of 2000.
 
The Fed
tightened rates six times in 1994 and once more in early 1995, but the strains
on the economy were felt in 1995. GDP growth was 1.1% and 0.7%, respectively, in
the first two quarters of 1995, as investors felt the effects of a 30% rise in
Treasury yields in the previous year."

>

Source:
Post-Fed Strife
David A. Gaffen
WSJ, August 7, 2006 3:04 p.m.
http://online.wsj.com/article/SB115495242802128625.html
 

Category: Federal Reserve, Fixed Income/Interest Rates, Inflation, Markets, Psychology

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Category: Consumer Spending, Economy, Federal Reserve, Fixed Income/Interest Rates, Real Estate

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Category: Consumer Spending, Economy, Fixed Income/Interest Rates, Real Estate

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Category: Economy, Fixed Income/Interest Rates, Inflation, Psychology

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Category: Consumer Spending, Fixed Income/Interest Rates, Real Estate

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Category: Fixed Income/Interest Rates, Real Estate

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Category: Economy, Fixed Income/Interest Rates, Real Estate

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Category: Economy, Fixed Income/Interest Rates, Politics, Psychology

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Category: Data Analysis, Economy, Federal Reserve, Fixed Income/Interest Rates, Markets