Market strategist Richard Suttmeier talks about the Fed’s latest move and where the tightening might go from here.
“The Fed raises the Discount Rate 25 basis points to 0.75%, leaving the Federal Funds Rate at zero to .25%. I disagree with the Fed’s notion that this modification will not tighten financial conditions for households on Main Street. The major equity averages straddle key levels Initial Jobless Claims are on the rise again. Equity Valuations have gotten stretched again according to ValuEngine.
On Tuesday I talked about the Federal Funds Rate versus the Discount Rate, so I begin by summarizing these points.
Since 1990 the Discount Rate was below the Funds Rate until June 25, 2003 when the Fed cut the funds rate to 1% leaving the Discount Rate at 2%. This was the final fuel for commodity, housing and stock markets speculative bubbles…”
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About Richard Suttmeier:
Richard Suttmeier is the chief market strategist for ValuEngine.com. Richard is an industry leader on the housing market and banking system and writes a newsletter covering The Great Credit Crunch. He produces a List of Problem Banks by name. He produces daily and weekly briefings covering the US Capital markets. Richard Suttmeier’s ValuEngine Four In Four video is available on forextv.com. Early in his career, he became the first long bond trader for Bache and later began the government bond department at LF Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the U.S. capital markets. He has also been the U.S. Treasury strategist for Smith Barney and chief financial strategist for William R. Hough. Suttmeier holds a bachelor’s degree from the Georgia Institute of Technology and a master’s degree from Polytechnic University.
About EQUITIES:
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