Sunday, Dec 10, 2006

Confusion over direction of US economy

The Times: Mixed signals are dividing the experts

BEN BERNANKE thinks Americas economy is strong, and that inflation remains a danger. The stock market believes the Federal Reserve Board chairman, so share prices hover at record levels. The bond market doesnt it expects that he will soon have to recognise the economys underlying weakness by lowering interest rates, not this week when the monetary policy committee meets, but almost certainly by the spring. The currency market is siding with the bond market, its players guessing that the Fed will indeed have to cut interest rates, making the dollar less attractive relative to the euro and sterling.

Posted by jellycaster @ 05:00 PM (497 views)
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