It’s been rumored that the Fed has reached a point were they won’t be lower rates again. “Talk” is that the quick response of the Federal Reserve to lower rates has already done it’s job to stimulate the economy. Now “talk” is focusing on the concern not to lower rates so far as to create runaway inflation. Let’s see how that goes.
One of the advantages of this rumor though, is that it has caused the weakened dollar to appreciate in value. According to a Bloomberg.com article posted today:
The dollar increased 0.9 percent to $1.5393 against the euro at 1:48 p.m. in New York, from $1.5532 yesterday. It has risen 3.9 percent versus the 15-nation currency since April 22, when the dollar sank to a record low of $1.6019. The dollar was up 0.3 percent to 105.13 yen, from 104.77. The euro fell 0.5 percent to 161.86 yen, from 162.71.
So, would this be a good time to speculate on the dollar?
I went to the experts to find an answer on whether or not the dollar would “stand or fall”? Specifically, I wanted to know if it’s time to speculate on the dollar or is it still a “euro theatre”? They played around with it for a while, presented it to their people, and came back with the following answer:
So, then I asked them, “How can you be so sure, after all the Fed’s not going to lower rates again, right?” After looking into things a little closer, they came back with the following response:
Okay, so that sounds reasonable enough.
So then I asked them: “Would I be better off moving back into the stock market now or leaving my money in cash, where I’m basically getting a ZERO percent return?”A wrong decision could leave me in a real Fixx.
So, I took their advice.. a good decision after today’s market action.
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