Interest Rates: Jackson Library: Stanford GSB

Hot Topics: Interest Rates

The following articles attempt to chronicle the economic effects of the previous cuts and current interest rate hikes on the U.S. economic landscape.

Selected articles

Due to contractual arrangements, access to some articles may be restricted to the Stanford community, and subscribers of the "Library Databases" offered through the GSB Alumni's Lifelong Learning Program. Inclusion below does not imply University endorsement of the ideas expressed.

Fed Again Leaves Rate Unchanged. New York Times, Oct.26, 2006
Saying that the economy was likely to continue growing at a "moderate pace," the Federal Reserve held its benchmark interest rate steady yesterday and gave investors reason to think that the rate could remain at its current level of 5.25 percent for months to come.
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Suggesting No Letup, Fed Raises Rate Again. New York Times, Aug.10, 2005
Saying that the economy was still getting stronger, the Federal Reserve raised its benchmark short-term interest rate again yesterday and gave investors reason to think that it would continue lifting rates through the end of the year.
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UPDATE 1-ANALYSIS-Rising U.S. interest rates pose recession risk. Reuters, July 11, 2005
The Federal Reserve could tip the U.S. economy into a recession if it sticks to its campaign of raising short-term U.S. interest rates the rest of the year, some analysts and investors warn.
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Fed Hardens Its Stance on Inflation; Rates Look Likely to Rise Higher and Maybe Faster; Message Boosts Markets. Wall Street Journal, Apr. 13, 2005
In their March discussion, Fed officials were concerned about recent high readings on consumer, producer and oil prices and more pervasive anecdotes about the ability of businesses to raise prices. But they also cited the likelihood that commodity and energy prices would ease, profit margins were wide enough to absorb costs without resorting to higher prices, and productivity growth remained strong.
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Special Report: FedFocus. CNN/Money, Mar.22, 2005
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The Fed's Magical Mystery Number. Business Week, Feb. 28,2005
Focuses on efforts of U.S. Federal Reserve Chairman Alan Greenspan and central bankers to find the interest rate that perfectly calibrates the economy.
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Fed Raises Interest Rates to 2.25 Percent. Associated Press, Dec. 14, 2004
The Federal Reserve on Tuesday raised interest rates for the fifth time since June and signaled it was likely to keep pushing them higher at a "measured'' pace in the new year.
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Greenspan's Legacy; The Navigator. Wall Street Journal, Nov. 18, 2004
Fed Chief's Style: Devour the Data, Beware of Dogma; As Retirement Looms in 2006, Greenspan's Strong Record Will Be Hard to Replicate; Did He Help Create a Bubble?
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As Greenspan Chases Inflation, Critics Shout, 'Faster! Gretchen Morgenson. New York Times, July 1, 2004
Inflation and market interest rates are far ahead of Alan Greenspan's federal funds rate, which he raised yesterday to 1.25 percent. Now the nation will see how well Mr. Greenspan, the Federal Reserve chairman, plays the game of catch-up.
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Up, Yes. But How Much, How Fast? Edmund L. Andrews. New York Times, June 27, 2004
ENJOY it while it lasts, because there may never be another time when money is this cheap. Having cut interest rates to their lowest level in more than 40 years, the Federal Reserve is expected to start raising them again at its policy meeting on Tuesday and Wednesday.
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Fed chief signals rate hike likely soon Greenspan cites strength of economy, inflation fears. Tom Abate. San Francisco Chronicle, April 22, 2004
Federal Reserve Chairman Alan Greenspan set the stage for an interest rate increase in congressional testimony Wednesday, the latest move in the central bank's campaign to brace Americans to pay more to borrow money.
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What rising interest rates will mean for your investments How Fed's plans will affect stocks, bonds, real estate and currency. Kathleen Pender. San Francisco Chronicle, April 22, 2004
In recent speeches and interviews, Federal Reserve Chairman Alan Greenspan and other Fed governors are laying the groundwork for an increase in the federal funds rate.
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Fed Maintains 'Patient' Stance on Rates, Holds Lending Target at 1 Percent. Bloomberg.com, March 16, 2004
Federal Reserve policy makers said U.S. hiring "has lagged'' and inflation is expected to stay low, allowing them to be "patient'' before raising borrowing costs.
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Fed spooks the market. Alexandra Twin. CNN/Money, Jan. 28, 2004
Stock and bond prices tumbled Wednesday after the Federal Reserve changed the language in its outlook for interest rates, sparking worry among investors about when the central bank might start raising rates.
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On Presidential Politics, the Fed Walks a Tight Rope. Eduardo Porter. New York Times, Jan. 28, 2004
Many Democrats are certain the Federal Reserve has a Republican bias. They point out that the Fed raised interest rates six times from June 1999 to May 2000, holding the economy back while Al Gore was running for president, but lowered them 13 times once George W. Bush defeated him.
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Fed Rate Hike Still Far Off, Minutes Hint. John M. Berry. Washington Post, Dec.12, 2003
Although some analysts and investors believe that the Federal Reserve could raise interest rates as soon as March, Fed officials are likely to wait until long after that, perhaps until 2005, according to minutes of an Oct. 28 policymaking meeting released yesterday.

Fed Keeps Short-Term Interest Rate at 1%. Edmund L. Andrews. New York Times, Oct. 29, 2003
The Federal Reserve kept short-term interest rates at 1 percent on Tuesday, the lowest level in 45 years, and suggested that it would continue to do so until at least sometime next year.
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Fed Holds Interest Rates at Low Level. John M. Berry. Washington Post, Oct. 29, 2003
Federal Reserve officials acknowledged yesterday that the U.S. economy is improving but made no move to raise interest rates. They reiterated that their main concern is a further drop in the nation's very low inflation rate.

Fed expected to leave short-term interest rates unchanged while trying to steady bond market. Martin Crutsinger. Associated Press, Aug. 10, 2003
A key short-term interest rate is at a 45-year low, and Federal Reserve policy-makers are expected to keep it there when they meet Tuesday. Fed officials, however, will certainly spend time discussing what, if anything, they can do to stop long-term rates from rising and derailing the economy.
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The wait-and-see Fed. Mark Gongloff. CNN, Aug. 8, 2003
After helping spur interest rates to a historic rise, there seems to be little the Federal Reserve can do about it but sit and wait, and maybe talk.
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Irrational exuberance revisited. Economist, July 19, 2003
Fearful of deflation, which raises the value of anything that pays a fixed rate of interest, investors bid bond prices up (and thus yields down). Andrew Smithers, a London-based economist, says that America's extraordinary number of economic imbalances entitles it to an entry in the Guinness Book of Records": low personal saving, record levels of household and corporate debt, enormous current-account and budget deficits, and so on.
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A Short Cut To Lower Long-Term Rates. James C. Cooper and Kathleen Madigan. Business Week, July 7, 2003
Discusses the decision of the U.S. Federal Reserve to cut the interest rate by a quarter-point to 1%. Improving outlook for the U.S. economy; Low inflation and an uncertain recovery; Possibility that the Fed is concentrating on getting long-term interest rates down and keeping them down until the recovery begins to show some energy; Impact of the decision to lower rates on the bond market; Effects of the interest rate cut on the housing market.
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Breaking the deflationary spell. Economist, June 28, 2003
Reports on the decision of the United States Federal Reserve Board to cut interest rates to their lowest level since the 1950s in an effort to ward off deflation.
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The Scary Side of Low Rates. Rich Miller, Peter Coy and Michael Arndt. Business Week, June 23, 2003
To U.S. Federal Reserve Chairman Alan Greenspan's way of thinking, the natural tendency of the economy is to grow. With the corporate set so cautious, the Fed's only hope is to use cheap credit to juice up other parts of the economy, including housing and the financial sector, so much that industrialists will take heart and start investing again. The key is using rock-bottom rates to help shift executives' expectations in a more positive direction and revive animal spirits. But with interest rates at levels not seen in more than four decades, there are risks to the strategy.
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