2/02/2005

Fed Hikes the Rates Again by .25

So the Federal Reserve has raised the short-term interest rate again, but why did long-term interest rates actually go down since last June? According to this article, Fed hikes rates again, long term rates reflect worry about inflation, and apparently investors in many market sectors are not worried significantly about inflation, i.e., yields on Treasury notes. The Fed threatens to raise rates and "measured" intervals, however, rates for mortgages, auto loans, longer-term home equity loans don't respond directly to those increases. Read the article for more information.

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