17 Oct 2005

Depende (3)

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The reason the market may look so confused is that investors are genuinely uncertain about how this cycle will evolve. Things can go wrong in two ways. Either inflation is a real problem and the FED will be forced to raise rates substantially to counter it. Or the Fed is over-reacting, in which case it could tighten policy too aggressively, bringing the economy to a juddering halt.

Financial Times, The Short View

1 comment:

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