Odds still high for another U.S. interest rate hike.

Pro Farmer, December, 2005

The U.S. interest rate curve continues to inch closer to inversion with short-term rates moving higher and long-term rates holding steady. (Mortgage rates have even inched down in some regional markets). At the Dec. 30 Federal Open Market Committee Meeting, odds are high Fed Chairman Alan Greenspan will push through another 0.25% short-term rate hike.

In the latest issue of LandOwner, editor Mike Walsten argues an inverted yield curve could "puncture" land demand.

Why? Mike says, "When banks pay more for deposits (which key off short-term rates) than they earn lending funds (which are based on long-term rates), they cut back activity. This, in turn, chokes off economic activity. At greatest jeopardy is the housing market, where low and adjustable-rate...

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