[lbo-talk] Fed kicks it up another quarter

Doug Henwood dhenwood at panix.com
Tue Sep 20 13:48:32 PDT 2005


Charles Brown wrote:


>CB: This wouldn't be a reason they would raise , but don't higher interest
>rates make the impact of current account deficit worse ? Foreign lenders get
>higher returns on U.S. notes ? Or not ?

Higher rates can attract foreign money but it makes the new debts more expensive to service. This is why people love economists - it's always "on the other hand."


>(Then there's the old "don't higher interest rates make more money for
>creditors in the U.S." ?)

Yeah, but the stock market does better when interest rates are falling than when they're rising. And a period of rising rates can bring out all sorts of interesting financial crises that had been hiding.


>My bank now has the name J.P. Morgan on the door.

Mine too. How's that for solidarity across borders?

Doug



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