Word: baumohl
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...predictable. The Federal Reserve Chairman made headlines again Tuesday, announcing a quarter-point raise in key interest rates. The hike, meant to stave off inflation in these times of hyperbolic growth and spending, caught some analysts off guard. "This raise is a bit unexpected," says TIME financial writer Bernard Baumohl. "There was a lot of uncertainty as to whether the Fed would move, since the economy has been showing signs of slowing down on its own." Example: Key consumer indicators such as retail sales and home purchases have eased in the past 10 months...
Moved PermanentlyMoved PermanentlyFortune Investor DataEven if they were a bit surprised by Tuesday's announcement, traders can now breathe a sigh of relief and enjoy their holidays. "This is the Fed's third tap on the brakes since summer," says Baumohl. "And it's probably not a bad thing, since it will end speculation for the next couple of months about any new movement on rates." It's likely, adds Baumohl, that this is the last interest rate adjustment we'll see in 1999, and perhaps well into 2000 - for reasons close to the chairman's heart. "Greenspan...
...With reporting by Bernard Baumohl and Aixa M. Pascual/New York and Adam Zagorin/Washington
This time, it seems, he was warning us about irrational panic. "Greenspan knew about the Producer Price Index numbers ahead of time," says TIME senior economics reporter Bernard Baumohl, referring to the big scary inflation number that ? along with Alan Greenspan?s own Thursday night speech about an "asset bubble" ? threw the markets into an early-morning tailspin Friday. "He warned about wild fluctuations because he knew how the market would react to the bad news about producer prices, and his role is to warn investors that an adjustment in stock prices could come quickly...
...Friday morning and sold stocks like so many hot potatoes. The Dow shed over 200 points in oh, the first 15 minutesof trading after the bell, with the NASDAQ following suit. But an hour later, the sell-off had screeched to a halt. Despite Greenspan's hint, says Baumohl, investors had overreacted again. "That producer-price number is probably more of a spike than a trend. Oil prices have probably peaked, and gains in productivity will probably help companies absorb this increase rather than passing it on to consumers. Don?t expect a similar increase in the Consumer Price Index...