A History of Greenspan's Interest Rates Moves Over the Past 13 Year

[Yavin4]

Go to this link:

http://www.federalreserve.gov/fomc/fundsrate.htm

and look at Greenspan's interest rates moves since 1991, and then come back and tell me that there is a political agenda behind these moves. Under Clinton, the lowest rate was 3.25% and that was at the start of his presidency.

[rkc3]

1. It might be the two beers I had for lunch, but...

Interest rates generally rise to hedge against inflation. One of the hallmarks of the Clinton era was unbridled job growth and the resultant increase in salaries. These increases were made to reduce inflationary pressures - such as rapidly rising salaries that often result in rapidly rising prices - which often accompany a rapidly growing economy.

bush, OTOH, has experienced sliding unemployment and job creation of the worst kind (low paying, no/low benefit jobs). Low interest rates spur economic investments to improve the economy when it's in the shitter.

[Yavin4]

2. I Would Wager Two Beers with You

that inflation under Bush has been much, much higher than inflation under Clinton. The soaring pay increases that you heard about during the tech boom was more myth than reality.

[Copernicus]

3. huh?

you dont have to bet blind.. the inflation data is readily available.. in fact, last year the markets went through a deflation scare.. generally, the fall off in inflation has been prompted by depressed asset markets and GDP growth up until the end of last year

[Yavin4]

4. So, What Was The Avg. Inflation Rate Under Clinton

compared to the Inflation rate under Bush? My guess is that they were about the same. I don't remember any inflationary panic during the Clinton years.

[54anickel]

5. The only inflation Greenspan watches for is wages. That has always been

the name of the game. What inflation truly is under * is hard to tell because of all the adjustments they do to the CPI and PCE. The adjustments aren't new to Bush, they've been going on for a long time. They just seem to be more "distorting", maybe due to all the stimulus he and Greenspan have been pumping into the economy.

Jim Wille just did a good write up on the question of adjustments this week.

http://www.financialsense.com/Market/daily/monday.htm