30 Jun 2006 The Fed Blinks, or Winks?
Posted at 16:16h in The Friday BriefThe Federal Reserve raised their benchmark interest rate for the 17th consecutive time yesterday which was a surprise to no one. But in a surprise to many, they suggested for the first time that a pause might be coming soon. Their statement said “the extent and timing of any additional” rate increases “will depend on the evolution of the outlook for both inflation and economic growth.” Stock markets surged on the news. The Dow Jones Industrial Average soared to close 217.24 points higher than when the statement was released, a gain of about 2% - its best day in more than three years. The NASDAQ Stock Market was up 3%, its biggest one-day rally since March 2004. Long-term bond yields edged down as prices rose.