Tuesday, November 01, 2005
Another Rate Rise, Another Mistake
The Fed's decision to raise the Fed Fund's rate to 4% today will only add pressure to an economy already suffering from other pressures. As we have been noting for several months the Fed is back at its old pattern or either being too loose or too tight for too long. Today's hike is more of them being too tight.
While recent statistics may be showing a stronger economy, I disagree. The economy is being pressured by higher oil, higher rates, etc. Credit cards are allowing lots people to keep on going despite higher gas and heating costs.
To read the Fed's statement.
http://www.federalreserve.gov/boarddocs/press/monetary/2005/20051101/default.htm
While recent statistics may be showing a stronger economy, I disagree. The economy is being pressured by higher oil, higher rates, etc. Credit cards are allowing lots people to keep on going despite higher gas and heating costs.
To read the Fed's statement.
http://www.federalreserve.gov/boarddocs/press/monetary/2005/20051101/default.htm
