The Fed And Interest Rates

Dave Pettit of The Wall Street Journal writes a daily column that
appears inside the first page of the journal's Money & Investment section. If
the headlines of Mr. Pettit's daily column are any accurate record of economic
concerns and current issues in the business world, the late weeks of March and
the early weeks of April in 1994 were intensely concerned with interest rates.
To quote, "Industrials Edge Up 4.32 Points Amid Caution on Interest Rates," and
"Industrials Track On 13.53 Points Despite Interest-Rate Concerns." Why such a
concern with interest rates? A week before, in the last week of March, the Fed
had pushed up the short-term rates. This being the first increase in ...

Want to read the rest of this paper?
Join Essayworld today to view this entire essay
and over 50,000 other term papers

afford to make loans. People seeing these rises in rates will tend to sell
their low interest assets, in order to acquire additional money, they tend move
toward higher yielding accounts, also further increasing the rate. Soon this
small change by the Fed affects all aspects of business, from the price level to
interest rates on credit cards.
Rises and falls in the interest rate can reflect many changes in an
economy. When the economy is in a recession and needs a type of stimulus
package, the Fed may attempt to decrease the interest rates to encourage growth
and spending in the markets. This was the case from 1989 until last month,
during which the nation's economy was generally considered to be in a slight to
moderate recession. During this period the Fed tried to keep interest rates low
to facilitate growth and spending in hard times. However, when inflation is
increasing too quickly and the economy is gaining strength, the Fed will attempt
to raise rates, as it ...

Get instant access to over 50,000 essays.
Write better papers. Get better grades.

Already a member? Login


The Fed And Interest Rates. (2004, March 16). Retrieved February 23, 2019, from
"The Fed And Interest Rates.", 16 Mar. 2004. Web. 23 Feb. 2019. <>
"The Fed And Interest Rates." March 16, 2004. Accessed February 23, 2019.
"The Fed And Interest Rates." March 16, 2004. Accessed February 23, 2019.
Join today and get instant access to this and 50,000+ other essays

Added: 3/16/2004 11:35:11 AM
Category: Economics
Type: Premium Paper
Words: 1144
Pages: 5

Save | Report


Save and find your favorite essays easier

The Fed And Interest Rates
The Fed And Interest Rates
Report On The Costs And Benefi
Britain And Joining The Economi...
Actions Of The Government And T...
China's Interest Rates
Economic 2
Economics: Foreign Trade
Great Depression 8
The Financial Effects Of Moneta...
Copyright | Cancel | Contact Us

Copyright © 2019 Essayworld. All rights reserved