What to make of the Fed's Recent Interest Rate Hike The Federal Reserve surprised virtually everyone after the markets closed yesterday by announcing their intentions to raise the Discount Rate by 0.25% (i.e. 25 Basis Points) from 0.50% to 0.75%. This marks the first time that the Federal Reserve has raised the Discount Rate since June of 2006.Read more
Monthly Archives: February 2010
Beware of the P.I.I.G.S.
If you have been wondering what specifically has been one of the main culprits in the stock market devaluation in recent days, look no further than to a group of countries in Europe affectionately known as the P.I.I.G.S. The countries, which many believe are the weaker components of the Euro-zone, include Portugal, Ireland, Italy, Greece and Spain.Read more
Are Interest Rates Heading Higher in 2010?
Using the Effective Federal Funds Rate as a proxy for interest rates, it is reasonable to conclude that interest rates are at historic lows and likely to only go higher.Read more
The Commerce Department today reported a 5.7% increase in gross domestic product ("GDP"), at an annual rate, during the fourth quarter of 2009 - 5.7%! This exceeded the 4.8% consensus median forecast by close to 20% on a relative basis. It also followed a 2.2% GDP growth rate in the third quarter of 2009. So why is the U.S. stock market barely reacting to this seemingly positive trend? The answer to this question lies in some of the significant data components underlying this most recent GDP report.Read more