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3/23/2005

Good move by the Fed?

On March 22, The Federal Reserve raised its key interest rate for the seventh time in a row. This raise can be good or bad depending on what market you’re in. For people planning to buy a home or set in a variable interest mortgage this is bad. For me, the raise is good; it has made certain investments more appealing. In the article “How Does 3% Sound?”, Aleksandra Todorova says CD rates are finally starting to improve. With rates of 3 percent or better, CD’s are investments to research again. The raise boosted Treasury bond prices, sending yields lower, and also helped slow inflation, which has been a current concern in the economy. In general, I believe the interest raise was a good move by the fed for the country.
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1 comment:

  1. Dr. Tufte2:24 PM

    I think Ralph has seen the light - an interest rate rise is neither good or bad on net.

    Diane and Lana got a little off topic - which is OK. I'm dubious about private accounts as well - most people have a very inflated view of their own investment style. Usually what they are missing is two elements that diversification can solve: 1) they pursue high returns (that have high risks) without diversifying those risks, and 2) they think the only way to reduce risk is to lower their return - and again the mesage is that diversification can handle this if they just do it.

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