>We agree, though, there is nothing wrong with a federal funds rate of 1
>percent, and a yield curve rising to around 5 percent on long-term bonds,
>when we are below full employment and with at most a slowly creeping rise
>in consumer prices. That was the case in the late 1950s, the last time the
>yield curve looked like it does now.
>Short-term political pressures in the late 1950s pushed the Fed away from
>an ideal set of interest rates. America's problems cannot be solved by
>raising the overnight funds rate. The Fed would surprise the market by
>leaving rates alone next week, but it would more likely than not be a
>pleasant surprise.
Makes me wonder how uppity the working class seems at the moment to Greenspan.
Todd
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