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January 31st 2006

Greenspan retires after rate hike

As expected, Alan Greenspan raised short term interest rates to 4.5% today, before stepping down as Chairman of the US Federal Reserve Bank. Greenspan served as Chairman for 18 glorious years, steering the US economy through a period of prolonged growth and record-low inflation. His successor, Ben Bernanke, has already hinted that he will conduct monetary policy with the explicit goal of achieving economic growth at any cost. In addition, Bernanke has insisted that he will not raise interest rates in order to forestall potential bubbles in asset prices. As a result, it seems reasonable to expect interest rates to remain lower during Bernanke’s tenure, which could affect the USD. The Economist reports:

[High oil prices] posee a dilemma for the central banker: keep interest rates low, and fuel the kind of runaway inflation last seen in the rich world in the 1970s and early 1980s; or raise them, and risk pushing the economy into the doldrums.

Read More: Betting on Bernanke

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Posted by Adam Kritzer | in Central Banks, US Dollar | 1 Comment »

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One Review of “Greenspan retires after rate hike”

  1. whiteline Says:

    Greenspan to retired! Long live Greenspan!

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