08 August 2006

Big Ben XVII

Update August 8th:
Seventeen is the magical number. Seventeen is when the 1/4% rate hikes finalize - for now.

Okay, Benjamin Bernanke was installed as Chairman of the Federal Reserve Board a lonnnnnng time ago. That - is old news.

In the beginning, it seemed that Ben needed some skills development in the "Loose Lips Sink Ships" department. His words had immediate effects on the stock market, and we can only guess that somebody spanked him behind closed doors.

Lately, his edicts have become nearly as cryptic as those of his predecessor, Alan Greenspan.

"We think inflation is going to moderate".
"The recent rise in inflation is of concern".
Rising crude oil & commodity prices "remain a risk to the inflation outlook."

Look for another quarter-point increase after the Fed's next meeting on Tuesday, August 8th. Currently at 5.25%, the federal funds rate could go to 5.5% at that point.
"Who cares", you ask? People borrowing money on installment loans for cars and homes.


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