The Fed And Interest Rates


Dave Pettit of The Wall Street Journal writes a daily column that appears inside the first page of the journal's Money & Investment section. If the headlines of Mr. Pettit's daily column are any accurate record of economic concerns and current issues in the business world, the late weeks of March and the early weeks of April in 1994 were intensely concerned with interest rates. To quote, "Industrials Edge Up 4.32 Points Amid Caution on Interest Rates," and "Industrials Track On 13.53 Points Despite Interest-Rate Concerns." Why such a concern with interest rates? A week before, in the last week of March, the Fed had pushed up the short-term rates. This being the first increase in ...

Want to read the rest of this paper?
Join Essayworld today to view this entire essay
and over 50,000 other term papers

they tend move toward higher yielding accounts, also further increasing the rate. Soon this small change by the Fed affects all aspects of business, from the price level to interest rates on credit cards.
Rises and falls in the interest rate can reflect many changes in an economy. When the economy is in a recession and needs a type of stimulus package, the Fed may attempt to decrease the interest rates to encourage growth and spending in the markets. However, when inflation is increasing too quickly and the economy is gaining strength, the Fed will attempt to raise rates, as it did late last March. This can be considered a sign that we are pulling out of the recession, or atleast it seems the Fed feels the recession of the early nineties is ending.
Directly after the Fed's actions, the stock market was a mess. The Dow took huge dips, falling as much as 50 points a day. Although no one knows exactly what influences the market, the increase in interest rates played a major ...

Get instant access to over 50,000 essays.
Write better papers. Get better grades.


Already a member? Login


CITE THIS PAGE:

The Fed And Interest Rates. (2004, September 10). Retrieved April 21, 2018, from http://www.essayworld.com/essays/The-Fed-And-Interest-Rates/14133
"The Fed And Interest Rates." Essayworld.com. Essayworld.com, 10 Sep. 2004. Web. 21 Apr. 2018. <http://www.essayworld.com/essays/The-Fed-And-Interest-Rates/14133>
"The Fed And Interest Rates." Essayworld.com. September 10, 2004. Accessed April 21, 2018. http://www.essayworld.com/essays/The-Fed-And-Interest-Rates/14133.
"The Fed And Interest Rates." Essayworld.com. September 10, 2004. Accessed April 21, 2018. http://www.essayworld.com/essays/The-Fed-And-Interest-Rates/14133.
JOIN NOW
Join today and get instant access to this and 50,000+ other essays


PAPER DETAILS
Added: 9/10/2004 05:00:02 PM
Category: Economics
Type: Premium Paper
Words: 1075
Pages: 4

Save | Report

SHARE THIS PAPER

SAVED ESSAYS
Save and find your favorite essays easier

SIMILAR ESSAYS
The Fed And Interest Rates
The Fed And Interest Rates
Report On The Costs And Benefi
Britain And Joining The Economi...
Actions Of The Government And T...
China's Interest Rates
Economic 2
Economics: Foreign Trade
Great Depression 8
The Financial Effects Of Moneta...
Copyright | Cancel | Contact Us

Copyright © 2018 Essayworld. All rights reserved