Monday, May 02, 2005

25 bps.

The Fed is expected to raise short term interest rates by a quarter point tomorrow. Although many believe that Greenspan and company should be more aggressive in increasing rates, I do not believe he is the idiot that some gold bugs and real estate bears believe he is. I think the Greenspan is keeping the pace of increases “measured” because he thinks the Chinese and others will slow purchases of treasuries in the coming months, which will have the same effect as lowering rates.


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