Posted on 05/13/2004 6:58:00 PM PDT by RWR8189
Economists see Fed raising rates in June, boosting them threefold-plus in 18 months: report. |
NEW YORK (CNN/Money) - The Federal Reserve will raise a key short-term interest rate to 2.5 percent 12 months from now and 3.5 percent by the end of next year, a newspaper reported Thursday. The Wall Street Journal said that 43 of 55 economists surveyed said they expect the central bank to raise its target for the federal funds rate, an overnight bank lending rate, starting in June, up sharply from a month ago when most economists surveyed said the Fed would raise rates in September.
Those surveyed predicted that the fed-funds rate would rise to 1.25 percent in June and hit 1.75 percent by December, 2.5 percent a year from now and 3.5 percent by December 2005. "Monetary policy has been so accommodative for so long. They have to return to some kind of normalcy," Arun Raha, an economist with Cleveland manufacturer Eaton Corp., told the newspaper. Economists were also quoted as saying the economy will handle the rate hikes well, though the report noted that the analysts have a long history of missing interest-rate moves. In addition, they lifted their job growth estimates to an average of about 207,000 jobs a month over the next 12 months from an average 177,000 when polled last month. |
(Excerpt) Read more at money.cnn.com ...
Great time to buy real estate--because everyone believes the bubble will burst. It never happens that way. In NYC this week there is an absolute mania of outbidding, with no end in sight. Prices will continue to explode for at least the next 24 months.
Greenspans way of harming President Bush.
Rank freakin' speculation: that is all cnnfn.com has to offer. That web site is sure to accentuate any negative in the current economy and minimize good news.
CNNfn is nuts! The most we can expect is 1.50 - 1.75 for one year. There is very little pressure to raise rates. The chicken little liberal media is trying hype rate increases to damage the recovery for their own political agenda.
And now for a little perspective that CNN didn't want to provide. The 10 year T yield:
http://finance.yahoo.com/q/bc?s=^TNX&t=my
I'll sell you the Brooklyn Bridge.
Nonsense. More like Greenspan's way of averting horrible inflation. Inflation right now is above 2%, the Fed Funds Rate is at 1%. That's BAAAD. Anytime there is a negative real interest rate, there is tremendous pressure on the money supply to skyrocket. I hope to see a Fed Funds rate of at least 2.5% by November 2004, and at least 4% by November 2005.
Look for the Euro to tank. Forget real estate - short Euros.
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