I'm not an economist. I'm a financial entrepreneur. I believe that entitles me to have an opinion on economics. You should just be very careful about caring what I think about the economy.
Most of the real economists I read today suggested that raising rates a quarter point was the right thing to do and that further rate hikes are likely, although they depend on future economic results.
For the record and for what little its worth (because, as I've already said, I am NOT an economist) I think Fed Chairman Greenspan's swan song, a quarter point hike in the Fed Funds rate, was a mistake. Enough already! Uncle!
With housing starts slowing, the GDP slowing and with last year's wage increase the lowest in percentage terms since 1996, I would suggest that there was no need for a rate increase, which only means that the odds of further deceleration in the economy increased today with the superfluous rate increase.
It is vitally important to note, however, that Chairman Greenspan and his successor, Ben Bernanke, have exactly 4.2 bazillion times more data and experience than I have, so my view isn't important. I guess that is why they don't call me before the FOMC meetings to get my input--and why, therefore, I must grouse about it afterward!
Furthermore, I would say that I have been a huge fan of Alan Greenspan and today's bad decision does not change that legacy. I credit him with having carried on the Volcker legacy, creating an economy virtually free of inflation and in many more years than not, growing.
I'm proud to live in a country where smart people like Alan Greenspan and Ben Bernanke get to make the important decisions!
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Tracked on: February 2, 2006 3:36 PM | Permalink to Trackback