FOMC Raises Federal Funds Rate 25 Basis Points to 1.25%

CNBC | June 30, 2004

[Tennessean4Bush]

Anything raising costs will hurt.

The Fed raising its rate 0.25 will not raise costs. This increase has been priced into the equity, treasury, and bond markets for about a month and a half.

[ChadGore]

The Bush recovery . . . CONFIRMED !

[xzins]

I just heard that on FoxNews. The cost increase has already been factored in.

[Tennessean4Bush]

You are correct about that.

[JimRed]

And away we go. Did the housing market collapse yet?

Interest rates on mortgages have gone up one full point over the last six months (to about 6.5% on 30 yr. fixed), possibly in anticipation of this increase. Still selling like gangbusters, just longer marketing time and slightly slower price appreciation.

[Faraday]

The market feared a 1/2 point rise, 1/4 point was priced in. A series of these marginal increases may occur. But the dollar won't strengthen fast enough to hurt our exports before the election. This is very favorable for the President's reelection.

[gipper81]

Totally expected and priced in. Greenspan has never raised rates 50BP the first time he begins interest rate increases.

[Tennessean4Bush]

And away we go. Did the housing market collapse yet?

Mortgage rates typically are priced off treasury notes I believe, which have already been rising over the last 3-4 months.

[ex 98C MI Dude]

How long until the media starts talking about the misery index?

[Steven W.]

you are correct - the 30 year t-bill

[b4its2late]

It's about time.

[rudypoot]

The evidence accumulated over the intermeeting period indicates that output is continuing to expand at a solid pace and labor market conditions have improved. Although incoming inflation data are somewhat elevated, a portion of the increase in recent months appears to have been due to transitory factors.

How is the media going to spin that? Eh, why spin it when you can just ignore it? =(

[Blood of Tyrants]

Yep. Up 30 points in the last 15 minutes.

[Right Wing Professor]

I was expecting a 1/2...

You and quite a bit of Wall Street. that's why the Dow jumped at 1 p.m.

[Moonman62]

The market feared a 1/2 point rise, 1/4 point was priced in. A series of these marginal increases may occur. But the dollar won't strengthen fast enough to hurt our exports before the election. This is very favorable for the President's reelection.

Since when does our economy hinge on exports?

However, the anticipation of raised interest rates have helped the dollar strengthen and oil prices are coming down.

[BurbankKarl]

In other news, Capitol One has announced its credit card rate has risen to 47.9%

[Tennessean4Bush]

However, the anticipation of raised interest rates have helped the dollar strengthen and oil prices are coming down.

Expect that trend to continue. The Fed will probably gradually increase by about 2 basis points over the next two years, provided, of course, that they are right about inflation signals being modest. If inflation truly begins to kick in they will accelerate that.

[jriemer]

We're doomed!

[jriemer]

John Kerry as a child

[Moonman62]

Expect that trend to continue. The Fed will probably gradually increase by about 2 basis points over the next two years, provided, of course, that they are right about inflation signals being modest. If inflation truly begins to kick in they will accelerate that.

Why would inflation kick in? Economic growth is deflationary. Greenspan is following dollar policy as he usually does. I know that isn't the official story, but I call it the way I see it.