Time to jack up interest rates?

[kalian]

http://money.cnn.com/2004/03/08/news/economy/fed_rates/index.htm

NEW YORK (CNN/Money) - Let's see: the job market's still sluggish, wage growth is slowing and inflation is all but dead, despite the lowest short-term interest rates in more than 40 years -- so what should the Fed do next?

Jack up interest rates, according to one of Wall Street's most respected economists.

Morgan Stanley chief economist Stephen Roach, long among the most bearish observers of the U.S. economy, on Monday reiterated a recent plea to Federal Reserve Chairman Alan Greenspan that he made last month: raise short-term rates. Now. By a lot.

...more...

Couple this with the ludicrous article that states that the software
was "too old" to report the PPI and you KNOW that something wicked
this way comes with regards to prices. 3% is one hell of a hike...
but I dare say necessary.

[mrdmk]

1. This line I find interesting

<snip>
Such a move would be unprecedented in Greenspan's 16-year tenure at the Fed. The only time on Greenspan's watch the Fed has raised rates that much, it took the central bank's policy-makers most of a full year, 1994, to do so.
<snip>

During the same time that Mr. Bill Clinton was attempting to balance the budget. What the article does not mention is that during the 2000 presidential race the Fed also raise also raised the interest rates so the economy, "did not over heat". Seems to me that the Fed is playing politics and attempting to keep the majority of the population down.

[54anickel]

2. Roach has been calling for a rate hike for a while now. Think I posted

a similar article in the SMW thread a couple of weeks ago. It's a tough call, it needs to be done, but a rate hike could bring the entire house of cards down. Just the "spook" factor alone in the stock market - they are jittery lately - might be enough to bring it down.

I think if there was a bit of a rally going on instead of this sideways to down movement he'd go ahead and give it a shot. Much of the market had a rate hike "priced in" before Friday's dismal job numbers. Those job number shook up the market pretty badly, you could tell the PPT stepped up to the plate. NASDAQ gained 6 points in less than 15 minutes with NO news or reports.

Of course, for those who do not believe in the PPT, I guess you could explain it as a LOT of funds bought a LOT of shares REALLY fast. That or there was another geo-magnetic storm. :evilgrin:

[swinney]

3. Greenspan takes care of a Repub

He hiked interest rates 13 times for Clinton-Gore. Inflation was dormant.

He has given Bush very low rates. Three years and no hikes?

He tried to zap Clinton and Democrats during 1994 and 2000 elections.

Intentional involvement in elections by Greenspan a devout Republican.