Sunday, October 30, 2005

So Long Alan and 'measure?'

Allan Greenspan's tenure as chairman of the Fed is coming to an end. This could also be the end of consecutive quarters the Fed has raised interest rates. The Fed's monetary policy will meet Nov. 1st and is expected to raise the interest rate by a quarter percentage point for the 11th consecutive quarter since June 2004. Interest rates have increased due to the Fed trying to keep inflation at bay.

Investors are saying there is almost a 100% chance that a quarter percent hike to 4% will occur. This will be the highest level since April 2001. How much higher do you think interest rates will continue to rise before we start seeing a decrease? With gas prices starting to decrease, will this entice the Fed to start lowering rates?

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