Fed will tighten monetary policy today.

[Lumberg]

Just about everyone is expecting Alan Greenspan's last action as Fed Chairman to be presiding over the tightening of money for the 13th straight time. This would bring the targeted Federal Funds rate at 4.5%, with the market expecting at least one more increase of .25% between now and the end of the year.

Welcome to new Chariman Ben Bernanke, who, if he is confirmed speedily, could still make Greenspan's retirement reception, scheduled to take place in the Eccles Building Atrium at 3:30 pm today.

If you've gotten this far, congratulations. This is a KARMA THREAD!

 

[broley]

so, does this mean gas prices are going to rise again?

 

[Lumberg]

Who knows, the Fed doesn't control that!

 

[SC4EVA]

Well im sure the tighter it is the hard it will be for the gas to pass no?

 

[gotmilk]

Tighten my nuts.

That's why I keep accounts offshore where I can generate twice as much interest.

Now, if I can only steal some gold teeth and cash out.

 

[Lumberg]

Uh, no.

Actually higher rates ameliorate inflation, so if anything it will encourage gas companies to eat more of the increases.

All the Fed does is try to control the COST of money.

Yeah I know that sounds weird, but just like the selling price reflects the price you must pay to acquire a good, interest rates are effectively the "price" of money. The higher they are, the more of a cost you incur when holding cash. So the money you hold in your pocket for gas will "cost" you more, but I don't think that's as significant as the inflation-fighting powers of higher rates.

 

[Lumberg]

bump