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Workshop Registration
The Reynolds Center has announced its 2009-10 free workshop schedule.
Select a workshop and register from the drop-down menu below.
Online Seminars
The Reynolds Center registration for Fall 2009 free online seminars.
Hooked on Kindle
By Chris Roush
Tracking the Business Behind the Tomato
By Jonathan Higuera
Five Questions with Bill Choyke
By Jonathan Higuera
Finding the Economy's Silver Lining
By Dick Weiss
Double Whammy: Oil and Housing
By Jennifer Hopfinger
History Might be Leading Indicator of Fed Rate Plans
By Reynolds Center Staff
June 30, 2004 04:27 PM
Federal Reserve Chairman Alan Greenspan's announcement of a 0.25 percent rise in interest rates this afternoon to 1.25 percent marked the first such tightening of the leading economic indicator in more than four years. It is also the first time the Fed has made any move since June 2003, when it cut rates by 0.25 percent.
Should the economy continue to strengthen, economists and analysts will speculate whether history will repeat itself as far as aggressive moves by Greenspan & Co. "With underlying inflation still expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured," the Federal Open Market Committee said in its statement.
Over an 11-month span from 1999 to 2000, the Fed raised rates on six separate occasions, reaching a plateau of 6.5 percent. That approach backfired as far as economic growth is concerned, prompting a complete reversal in strategy. With a recession seemingly imminent in late 2000, the Fed began to cut rates on an ongoing basis beginning Jan. 3, 2001 and ending Dec. 11, 2001. This period included 11 cuts and lowered the indicator by 4.75 percentage points to a four-decade low of 1.75 percent.
Following this flurry of action, the Fed cut rates on two more occasions, in November 2002 (0.50 percentage points) and June 2003. Among other notable trends in Fed rate history:
- The Fed hiked interest rates from 3 percent in February 1994 to 6 percent in February 1995, tightening the indicator seven times.
- From July 1963 to December 1965, rates rose from 3 percent to 4.25 percent over the course of three tightening moves.
- Five rate rises spanning a 12-month period beginning in September 1958 lifted the Fed rate from 1 percent to 4 percent.
If history is any indicator, expect a second rise within the next two months. That is the window in which a second rate move has occurred following the initial tightening under Greenspan's watch.
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Copyright © 2008 Donald W. Reynolds National Center for Business Journalism
The Reynolds Center has announced its 2009-10 free workshop schedule.
Select a workshop and register from the drop-down menu below.
The Reynolds Center registration for Fall 2009 free online seminars.
By Chris Roush
Tracking the Business Behind the Tomato
By Jonathan Higuera
Five Questions with Bill Choyke
By Jonathan Higuera
Finding the Economy's Silver Lining
By Dick Weiss
Double Whammy: Oil and Housing
By Jennifer Hopfinger
History Might be Leading Indicator of Fed Rate Plans
By Reynolds Center StaffJune 30, 2004 04:27 PM
Federal Reserve Chairman Alan Greenspan's announcement of a 0.25 percent rise in interest rates this afternoon to 1.25 percent marked the first such tightening of the leading economic indicator in more than four years. It is also the first time the Fed has made any move since June 2003, when it cut rates by 0.25 percent.
Should the economy continue to strengthen, economists and analysts will speculate whether history will repeat itself as far as aggressive moves by Greenspan & Co. "With underlying inflation still expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured," the Federal Open Market Committee said in its statement.
Over an 11-month span from 1999 to 2000, the Fed raised rates on six separate occasions, reaching a plateau of 6.5 percent. That approach backfired as far as economic growth is concerned, prompting a complete reversal in strategy. With a recession seemingly imminent in late 2000, the Fed began to cut rates on an ongoing basis beginning Jan. 3, 2001 and ending Dec. 11, 2001. This period included 11 cuts and lowered the indicator by 4.75 percentage points to a four-decade low of 1.75 percent.
Following this flurry of action, the Fed cut rates on two more occasions, in November 2002 (0.50 percentage points) and June 2003. Among other notable trends in Fed rate history:
- The Fed hiked interest rates from 3 percent in February 1994 to 6 percent in February 1995, tightening the indicator seven times.
- From July 1963 to December 1965, rates rose from 3 percent to 4.25 percent over the course of three tightening moves.
- Five rate rises spanning a 12-month period beginning in September 1958 lifted the Fed rate from 1 percent to 4 percent.
If history is any indicator, expect a second rise within the next two months. That is the window in which a second rate move has occurred following the initial tightening under Greenspan's watch.
Copyright © 2008 Donald W. Reynolds National Center for Business Journalism