It has been a long, hot summer of watching Alan Greenspan and waiting for the Federal Reserve chairman to cut interest rates. Surely, many have thought, the next cut will be enough to spark confidence in the economy and shake us out of this downturn.
A quarter-point cut came again last Tuesday and what happens? Stocks drop. Bond prices climb. The conclusion of many analysts: another rate cut is coming; let’s wait and see what happens. And so we shall, and we anticipate continued frustration among investors as low earnings reports and bad news from various sectors of the economy continue to pull front page coverage.
The Federal Open Market Committee meets next in October. Will we see another quarter cut? It’s more than likely, and perhaps this will be the one that makes a difference.
In the meantime, from Wall Street to Main Street Mr. Greenspan and Company will remain a hot topic of conversation — and second-guessing.