Newspaper article St Louis Post-Dispatch (MO)

Market Bets Fed Will Keep Rates Steady

Newspaper article St Louis Post-Dispatch (MO)

Market Bets Fed Will Keep Rates Steady

Article excerpt

The stock market is betting that the Federal Reserve will hold the line on interest rates even though economic data might argue for a cut, but some experts believe a cut would be like waving a red flag in front of a charging bull.

This past week, investors wrote obituaries about inflation, which has been dead for years, as the stock market repeated its high-wire act.

The Dow Jones industrial average moved closer to 7000, powered by good news on inflation as it gained 116.61 points for the week, although it dropped 10.77 Friday to close at 6813.09. , t The market turned to the coming meeting of the central bank's policy-setting Federal Open Market Committee. But unlike the past year, there was no evidence of the usual paranoia leading up to the FOMC's meeting, set for Tuesday and Wednesday. Investors were not worried that Tthe Fed would raise interest rates, which could threaten to bring down the longest bull market in history. In fact, there was jubilation in some quarters that, based on the current economic numbers that showed inflation was still in check, perhaps later this year the Fed might actually reduce interest rates. …

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