Interest Rates rise .5% - Market says "So What" : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Interest Rates Rise

This is actuall from Austalia. When is the Federal Reserve going to announce the intentions for the US. I would have thought it would have been by now. (2:00pm est)

Interest rates rise half a per cent 1: 00 PM AEST February 2

Interest rates are to rise 0.5 per cent, with the Reserve Bank today announcing it was acting because of faster world growth and rising inflation. The half a percentage point increase is a major surprise for financial markets, which had been expecting another modest rise of 0.25 per cent.

But in a positive sign, the Reserve said today's rise had moved interest rates to a neutral stance, indicating further rate rises may now be unnecessary.

"In the bank's view, a rise of a half a percentage point makes sense, both in light of the economic outlook, and of the opportunity it gives to signal that monetary policy has been moved to a neutral stance," Reserve Bank governor Ian Macfarlane said in a statement.

The RBA said it was not acting to halt economic growth, but to head off any threats to inflation.

"This tightening, like its predecessor in November, can be viewed as pre-emptive in that it has occurred before overheating has emerged, and its aim is to prevent that eventuality from occurring," the reserve said.

"It will not bring the expansion to an end."

The rise was good news for the dollar, which jumped three tenths of a cent within 10 minutes of the announcement.

-- Duke1983 (, February 02, 2000


BTW, Australia Market ended up 1.03%

-- Duke1983 (, February 02, 2000.

From CNNfn:


Wall St. sits, waits for Fed

Stocks slightly higher but activity limited ahead of rate announcement By Staff Writer Jill Bebar February 02, 2000: 1:36 p.m. ET

NEW YORK (CNNfn) - U.S. stocks posted slight gains at Wednesday afternoon, with trading confined to a very narrow range in front of the Federal Reserve's decision on interest rates, expected in the afternoon.

But if the Fed, as expected, boosts interest rates by a quarter percentage point, an afternoon rally may be in the works, as Tom Giles, portfolio manager of UAM TJ Core Equity Fund, told CNNfn's Talking Stocks. (196K WAV) (196K AIFF)

Shortly before 1:30 p.m. ET, the Dow Jones industrial average rose 9 points to 11,050.05. The Nasdaq composite index advanced 21.40 to 4,073.38, and the S&P 500 index gained 1.73 to 1,411.01.

On the New York Stock Exchange, advances outnumbered declines 1,548 to 1,312 as trading volume reached 580 million shares. On the Nasdaq, advances led declines 2,165 to 1,698, on volume of 855 million shares.

Market participants said trading activity was subdued. "It's very quiet. No one is willing to make bets until 2:14 (p.m. ET)," said Brian Conroy, head of listed trading at J.P. Morgan, referring to the minute before the Fed is scheduled to announce its decision.

Treasury prices rose sharply, with the bellwether 30-year Treasury bond gaining a full point in price. That lowered its yield to 6.34 percent, its lowest level of 2000, from 6.42 percent late Tuesday. The dollar rose the yen, but fell against the euro.

-- Duke1983 (, February 02, 2000.

Anyone care to place bets as to how much ol greenie will raise um? I been betting all month it'll be 1/2 percent, but think maybe not cuz he wouldnt wanna hurt wallstreet....Come on,,,,I go 1/2% do I hear anyone else?


-- consumer (, February 02, 2000.

And the answer is:

Fed raises rates

2:16 p ET The Federal Reserve raised short-term interest rates by a quarter point Wednesday, in line with expectations.

-- Duke1983 (, February 02, 2000.

And, surprise! The markets seem to be reacting negatively!

wait, no! They're down, they're up....

They don't know what to do!

-- Duke1983 (, February 02, 2000.

Buckle Up!

Down we go, to yewt again test our support levels!

-- Duke1983 (, February 02, 2000.

.25 was completely baked into the market (heck, 30 out of 30 analysts predicted it), so we should expect little movement off this bump.

Federal Reserve Press Release

For immediate release

The Federal Open Market Committee voted today to raise its target for the federal funds rate by 25 basis points to 5-3/4 percent. In a related action, the Board of Governors approved a 25 basis point increase in the discount rate to 5-1/4 percent.

The Committee remains concerned that over time increases in demand will continue to exceed the growth in potential supply, even after taking account of the pronounced rise in productivity growth. Such trends could foster inflationary imbalances that would undermine the economy's record economic expansion.

Against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the Committee believes the risks are weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future.

In taking the discount rate action, the Federal Reserve Board approved requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Kansas City and San Francisco. The discount rate is the rate charged depository institutions when they borrow short-term adjustment credit from their district Federal Reserve Banks.

They still see inflationary pressures, "even after taking account of the pronounced rise in productivity growth." We'll see if the markets shrug this off over the next week or so.

-- DeeEmBee (, February 02, 2000.

Help me please!!

I can't remember if we think the Feds are FOR the raise in interest rates because the market is overheated and prices are artificially high, and it needs to come down to punish the self-indulgent yuppies OR

if we are AGAINST the raise in interest rates because we know the Feds need to keep the markets artificially propped up to prevent the masses from being discontent with plummeting stocks and finding out the real truth about Y2K now being HIDDEN from us by the government!!

I KNOW there is a conspiracy but I'm all mixed up about who is manipulating what and how and why and whaaaaat about my stocks and gold and stuff? I mean, I KNOW Mr Greenspan cannot simply be doing what he feels is in our overall best interests as an economy. NO WAY!! Help me with a simple explanation of the conspiracy, please.

-- Imso (, February 02, 2000.

Imso -

Switch to decaf. Thanks.

-- DeeEmBee (, February 02, 2000.

(He...gets out crystal ball...gazes intently...clears throat...and speaks!)

Ahem! A 25 basis point raise in discount rate today means there will be another 25 point raise in about six weeks. And probably another one before June.

(He folds his tent and mysteriously fades into the night.)

-- Brian McLaughlin (, February 02, 2000.


And that's ANOTHER thing--

I think those chemtrails might have caffeine in them!!! I have been all nervous and jittery since they started.

Anyone out there go anything on this??!!

-- I'mSo (, February 02, 2000.

"Happy chemtrails to you" -- Adroit Rogers

-- dinosaur (, February 02, 2000.

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