Risks abound as Fed plans rate hikes

[dArKeR]

By Martin Wolk
Chief economics correspondent
MSNBC
Updated: 6:16 p.m. ET June 28, 2004

Federal Reserve Chairman Alan Greenspan meets with his central banker colleagues this week to set the strategy for launching perhaps the most important series of interest rate hikes in a decade. The two-day meeting marks a historic turning point that will push the economy into a new period fraught with risk, according to MSNBC.com’s semiannual economic roundtable.


When the Fed’s policy-makers conclude their meeting Wednesday, they are widely expected to announce a quarter-point hike in the benchmark overnight lending rate, pushing it up from its lowest level in 46 years. The Fed is expected to continue raising rates, probably a quarter-point at a time, well into 2005. The risk is that a surge in inflation could force the Fed to raise rates faster and higher, choking off an economic expansion that is just beginning to hit its stride.

http://msnbc.msn.com/id/5297658/

[Centre_Left]

1. Will bubbles burst? (nm)

nm

[gasperc]

2. and when they do

will housing and other prices be pressured down? eliminating the need to keep raising rates or are they forced to raise rates because of the chronic and systemic deficits but they don't want to say that because it would vindicate the need to RAISE TAXES back to the way they were

[stevebreeze]

3. to my paycheck there is little difference between higher interest rates

and higher taxes.....