Word: hiked
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Dates: during 1990-1999
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...burger on the grill, Martha. Just in time for Labor Day, some surprisingly good labor news sent Wall Street traders off to the Hamptons happy. After spending a glum week worried that a string of less-than-positive economic numbers would spook the Federal Reserve into yet another rate hike in October, traders were wishing and hoping that the August unemployment numbers would show that inflationary pressures had already been brought to heel. The news was even better than they hoped: Unemployment was down, but not too much, and hourly wages were up, but by just pennies. The Dow shot...
...reported Thursday that GDP growth from the April-to-June quarter was actually 1.8 percent, instead of the 2.3 percent the government had estimated a month ago. In reality, of course, that has nothing to do with Tuesday?s action ?- even with a strong market reaction, an interest rate hike takes at least six months to reverberate through the economy ?- but it?s sure got plenty to do with how the Fed spends its fall...
Having heard from the Fed exactly what they expected to ?- that creeping inflation pressures necessitated a rate hike of a quarter-point (25 BASYS points) but no nudge in the now-neutral bias -? the markets may now exhale, slump a little, and get back to fundamentals. "The good news is that Greenspan remains ahead of the curve, acting promptly to hold down inflation just like he said he would," says TIME senior economics reporter Bernard Baumohl. "But the markets had their rally Monday ?- and most of the time it?s ?buy on the rumor, sell on the news...
...markets finally got used to the idea on Monday. The Dow came charging out of the gate to steam up more than 130 points, and after a midafternoon lull sprinted through the tape at 199.15 ? well into record territory. And all this on the eve of a rate hike? Welcome to the "discount" rally. "It?s not so much whether Greenspan raises rates or not, it?s how sure they are that they know what he?s going to do," says TIME senior economics reporter Bernard Baumohl. "Right now they?re sure ? they?ve discounted for the rate hike over...
...clears his throat. "There?s always that bit of uncertainty as the day draws near," Baumohl says. Come noon, along with the profit-taking from Monday to contend with, there?ll be plenty of investors who don?t feel quite as smart as they did the day before. No hike? Twice the hike? Rally? Sell-off? Stay out of it until Greenspan?s gospel (2:15 p.m.) is fully digested. For the record, the safe betting is on one quarter-point hike (come on, guys ? when was the last time the Fed raised a half-point?) and then let things...