A little market overreaction.(Editorial)

Pensions & Investments, April, 2006 by Clowes, Michael J.

Byline: Michael J. Clowes The stock market threw a temper tantrum last week when the Federal Reserve Board had the nerve to raise the fed funds rate another quarter of a percentage point to 4.75%. Traders and investors were additionally annoyed that new Fed Chairman Ben Bernanke had the temerity to suggest another rise might be coming that would take the fed funds rate to 5%.

The market's reaction was almost like that of a small child stamping his foot when his parents didn't do what he wanted. While the general consensus on the Street before the announcement was that a 5% fed funds rate was likely, most traders apparently were hoping the analysts were wrong in those expectations. Mr. Bernanke disappointed them. Now the move to a 5% fed fund's rate is...

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