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November 1, 2005
End of "measured" pace?
We'll see in 45 minutes or so. CNN has this story on their web site:
With Greenspan's term set to end on January 31, there is rising hope that the Fed may finally be prepared to remove the statement about how it plans to raise interest rates at "a pace that is likely to be measured."
"I'm hoping that Greenspan will see it in his wisdom to say, 'Okay, I'm going to put the brakes on and let the new Fed digest this economic data'," said Andrew Corn, chief executive officer Clear Asset Management, a New York-based institutional money management firm. "Changing the 'measured' sentence would have the right effect."
Corn argues that despite recent increases in the prices of oil and food, consumers have yet to get hit hard by price increases of other types of goods.
I'm thinking "measured" will stay in the statement today, 50-50 odds on the next one, and probably gone by January. Whether the rate hikes continue in after that or not, there will, I think, be a need for new language by that time.
Posted by William Polley at November 1, 2005 12:47 PM
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