The federal reserve leave interests unchanged

#1 Postby **cycloneye** » Tue Dec 09, 2003 2:50 pm

No move from the feds to go up or down on the interests this time.For those who have stocks how can the interests unchanged affect or not you? Lindaloo you can answer it? I dont have stocks and that is why I ask.

#2 Postby **Stephanie** » Tue Dec 09, 2003 2:58 pm

The good thing for stocks is that it is still cheap for companies to borrow money to invest in their companies. It's also cheaper for people to buy on credit, so buying habits will stay or increase from their current levels.
Also, interest on back accounts, certificates of deposit, etc is really low, so people will be more likely to buy stocks as long as the market continues to trend up.

Bonds are attractive now since the interest rates are low, the price of the bond is high, so it does provide some competition for the stocks.

#3 Postby **cycloneye** » Tue Dec 09, 2003 3:01 pm

Thanks for the answer Steph.

Lindaloo · #4 Postby **Lindaloo** » Tue Dec 09, 2003 3:24 pm

Dang Steph, ya beat me to it. lol.

#5 Postby **cycloneye** » Tue Dec 09, 2003 4:18 pm

Well at the closing bell the dow was down -41.65 closing at 9923 after being briefly above 10,000 this morning.

JCT777 · #6 Postby **JCT777** » Tue Dec 09, 2003 4:52 pm

Low interest rates is good for those of us who need to borrow.

#7 Postby **Stephanie** » Tue Dec 09, 2003 8:46 pm

Lindaloo wrote:Dang Steph, ya beat me to it. lol.

I figured you were busy on patrol!!! :lol:

No problem Luis!

Actually, the bond market, IMHO, is now behaving like the stock market did in the late 1990's. As long as the interest rates remain low, people will continue to invest in them thus "bet" that the prices will keep rising. the danger is that once the Fed raises the rates then the floor will drop out of the bond market and perhaps even the stock market to a lesser degree. I can't see them touching it anytime soon. They want to keep the economy rebounding and there's still a few areas that need to pick up the pace.

AussieMark · #8 Postby **AussieMark** » Tue Dec 09, 2003 8:59 pm

Your guys are wise, some of our Major Financial Institutions have recently increased interest rates and they say that they bad about doing it but it has to be done. But in all honesty if that was true wouldn't they of not increased them in the first place.

#9 Postby **Stephanie** » Tue Dec 09, 2003 9:21 pm

Tropical -

Usually they raise the interest rates when they need to control inflation.

The federal reserve leave interests unchanged

The federal reserve leave interests unchanged

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