January 28, 2004
Fed to Keep Rates Steady
The Fed has sent strong signals that it is going to keep interest rates low. One reason is that orders for costly durable goods was flat in december. There is also the weakness in the labor markets.
"My guess is that the ... (FOMC) will say that the economy is improving solidly, but with the labor markets showing only modest improvement and inflation remaining low, there is little reason to do much for a 'considerable period,'" said economist Joel Naroff of Naroff Economic Advisors Inc. in Holland, Pennsylvania.Posted by Steve at January 28, 2004 10:31 AM
Alas, the Fedspeak indicates that the days of wine and roses will be gone er, sooner than they were last month. I wonder if they'll last November before they raise rates?
Posted by: Karl Hallowell on January 28, 2004 07:03 PMDoes anyone else think that the change in bias by the Fed may be a sign that Friday's GDP number will be better than expected?
Just my little theory...
Posted by: Clay Ranck on January 28, 2004 08:50 PMI guess I'm wrong...they didn't change the bias (guess I should read things more closely). But they did drop the language about keeping rates low for a "considerable period". I stand by my prediction that GDP growth for Q4 will be higher than expectations.
Posted by: Clay Ranck on January 28, 2004 09:18 PM