Froth busting
Article Abstract:
The US Federal Reserve aims to warn consumers not to increase borrowing because stock prices have risen, and reduce the froth levels of the stock market, according to Greenwich Nat West. The Fed may still keep rates stable unless there is an additional acceleration of credit growth. US interest rates are already high in real terms, and corporate profits and net exports are likely to be affected by the Asian crisis. Labor costs do not appear to be causing inflationary pressure. Rates are only likely to rise if equity markets do not react to the warning of higher rates.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1998
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Twin fears
Article Abstract:
US share prices have been affected by concern over interest rate rises, in addition to worries of worsening earnings forecasts. US interest rates could be increased on May 20 1997. Lower earnings could result from a rise in interest rates. Share prices have dropped more rapidly than bond prices. There is especial concern about US wage inflation which could hit both corporate earnings and mean that interest rates are more likely to rise.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1997
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