Wall Street

by Freddie Mooche

Online Stock Market Trading The Fed raised key interest rate a quarter of a point Wednesday which marked the Central Banks sixth rate hike for fed fund rates, bringing bank lending rates to 2.5 percent.

Meanwhile, Interest Rate futures show traders expect a 0.25% point rate cuts at the Fed's next two monetary policy meetings on October 31 and December 11.

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The dollar weakening versus the GBP can also be attributed to expectations that the Bank of England will raise its key interest rate on Thursday to 5.75 %.

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The same sentiment is shared by the Swiss National Bank who raised interest rates by 25bp yesterday, bringing the mid point of their target range to 2.5 percent.

Stock Investing Game Feb 2, 2005 (AXcess News) New York - The Fed raised key interest rate a quarter of a point Wednesday which marked the Central Banks sixth rate hike for fed fund rates, bringing bank lending rates to 2.5 percent.The Fed fund rate increase came as no surprise to the market after the Central Bank's two-day meeting in New York with policy-makers, led by Alan Greenspan, Chairman.

Traders are at a standstill due to the differences in opinion between the majority of investors and the Fed's themselves. Many investors believe that the US will have no choice but to cut rates even more in order to withstand the damage that the winter will bring in regards to gasoline prices. The Fed, in statements released by Mishkin, Rogers and Gross reiterated their faith in economic data, and went so far as to say that the quarter point interest rate cut could even be reversed if all went well before year's end.

Journal Prime Rate Street Wall According to the Central Bank's statement released Wednesday, the Fed said it planned to maintain a "measured stance", which investors took to mean there would be more interest rate hikes in the future. The Fed statement said, "With underlying inflation expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured." The Central Bank believed that robust growth in productivity was supporting economic growth and that inflation remain contained.

The Fed has left its key interest rate unchanged at 5.25% over recent months, even as the European Central Bank has raised the cost of borrowing seven times since December 2005. Analysts expect the ECB to raise the rate to 4% when it meets Wednesday.

Stock Market News The view of the Central Bank Committee appears to be unchanged from its earlier thinking when it began raising the Fed Fund rate, the rate charged banks for over-night loans. Though investors expect the Fed to continue raising rates, just when and how much remain a mystery.AdvertisementIf investors are looking for a crystal ball, the Chicago Board of Trade may be the place the start as traders were hedging up rate futures contracts for March and May, betting on another quarter-point hike in interest rates. June contracts remained quiet, which points to traders longer-term uncertainties.

Stock Investing Basics On Wall Street, stocks held gains while the ten-year treasury note rose slightly, bringing the benchmark bond's yield down to 4.41 percent.

Stock Investing Software Traders believe that the "neutral zone" for interest rates, where cost would hold inflation in check, is between 3.5 to 4 percent.

Stock Market Trading Though indications on the Chicago Board of Trade's June futures contract says that investors think 4 percent may be too high and that the Fed should consider slowing down its interest rate hikes.

Stock Investing For Dummy A general consensus is that investors can look forward to at least three more quarter-point rate increases this year. Anymore would be considered excessive by bond traders.

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