delayed fed rate cute due to Y2K : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Just a thought--long and short term rates on government securities are at all-time lows, but the Fed has vehemently refused to cut overnight lending rates. This despite commodity deflation, Asian recession, global liquidity crisis, etc. Greenspan & Co have hinted it's the fear of wage inflation, but doesn't it serve the Fed well to delay any rate cut for as long as possible if they DO expect serious Y2K fallout? A rate cut would only inflate stock prices even further, making the ultimate "day of reckoning" due to Y2K an even more severe drop than the 30% decline Yardeni predicts. We know the Fed has expressed concern about the problem (they're even printing more money expecting large cash withdrawals on the part of average Joes). Any thoughts??

-- alfred g. litton (, September 02, 1998


Interesting that today (after hints and comments by Greenspan about interest rate cuts) the market rose: about 400 points = pure speculation? There is certainly no change in "business" levels that would show me that the value of any average business went up by that much.

-- Robert A. Cook, P.E. (, September 09, 1998.

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