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I would take the statement from the last Fed meeting as being more important
than Moskow's statement. High energy prices can and do cause recessions.
Only time will tell. I am not saying it is a guarantee (a cut), but as of
now, I'd be surprised if they did not ease 25 bps next month.
---
Steven W. Poser, President
Poser Global Market Strategies Inc.
http://www.poserglobal.com
swp@xxxxxxxxxxxxxxx
Tel: 201-995-0845
Fax: 201-995-0846
-----Original Message-----
From: J W [mailto:inbox@xxxxxxxxxxxx]
Sent: Sunday, December 31, 2000 5:25 PM
To: realtraders@xxxxxxxxxxx
Subject: [RT] Re: OOPS - There goes the anticipate rate decrease
I don't know about that. Energy prices were referred to as a sort of
tax. As such, a tax applies differently to different groups while
interest rates have a more general effect. OPEC is also making noise
about keeping oil prices high regardless. And natural gas is high
but I don't know if that is artificial and will decline as warmer
weather approaches. In any case, I think high energy prices are good
as they encourage further development of alternative sources.
Seems to me that if this were to be considered an "official"
statement, then the intent would be to say that a rate change is not
guaranteed. The FED doesn't want to return to "irrational
exuberance" <g>...
JW
--- In realtraders@xxxxxxxxxxx, "Steven W. Poser \(psn\)"
<sposer@xxxx> wrote:
> Note however that suggesting that energy prices are higher is also a
> suggestion that such increases, if they are not following through to
> inflation, which seems to be implied in the quote, is equivalent to
further
> rate increases. While this may take the odds of 50 basis points
down from
> more than 50% now to near zero, I doubt that it will take the odds
below
> 100% for 25 bps on Jan. 31.
>
> Steve Poser
>
> ---
> Steven W. Poser, President
> Poser Global Market Strategies Inc.
> http://www.poserglobal.com
> swp@xxxx
> Tel: 201-995-0845
> Fax: 201-995-0846
>
> -----Original Message-----
> From: J W [mailto:inbox@x...]
> Sent: Sunday, December 31, 2000 3:27 AM
> To: realtraders@xxxxxxxxxxx
> Subject: [RT] OOPS - There goes the anticipate rate decrease
>
>
> Saturday December 30, 2:41 pm Eastern Time
>
> Chicago Fed's Moskow sees no recession - paper
>
> CHICAGO, Dec 30 (Reuters) - U.S. economic growth is slowing, but the
> economy is not heading toward a recession, the president of the
> Federal Reserve Bank of Chicago said in a newspaper interview this
> weekend, reiterating a view he has previously expressed.
>
> Chicago Fed President Michael Moskow declined to say whether the Fed
> will cut interest rates, the Chicago Sun-Times said in its Sunday
> editions.
>
> The Fed's interest-rate setting body, the Federal Open Market
> Committee, warned on Dec. 19 that the economy was slowing so fast
> that there was a risk of a sharp downturn, a signal the central bank
> was preparing to cut rates soon. Moskow will be a voting member on
> the FOMC in 2001.
>
> ``I can tell you that we will be monitoring very carefully all the
> various indicators (of economic performance) ... and gathering a
host
> of anecdotal information as well,'' Moskow told the Sun-Times. ``And
> we'll be prepared to do what's best for the American people.''
>
> Moskow noted that the housing market has stayed ``at a very high
> level,'' while businesses can still borrow and spend money, despite
> higher interest rates. Also, despite layoffs announced by many
> companies in recent months, those workers can still be absorbed into
> other jobs, he said.
>
> ``We may see a certain number of layoffs that get a lot of
> publicity,'' Moskow said. ``But if the economy is still expanding
and
> total jobs (created) are still going up, say 100,000 to 200,000 a
> month, then those people are being absorbed into the economy and
> other jobs.''
>
> Moskow said the Fed is carefully watching rising energy prices. ``In
> essence, it's like a tax increase,'' he said. ``It hurts businesses
> as well, increases their costs. It's one of the elements of the risk
> that we see toward weaker economic growth going forward.''
>
> Moskow said earlier this month that he did not see a significant
risk
> of recession, though there has been slowing in the economy.
>
> A Chicago Fed spokesperson could not be reached to comment on the
Sun-
> Times article.
>
>
>
>
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