I think Greenspan is setting the market up for something much more palatable. If you get the Dow back to 6,500 or 6,600, and you take that real speculation out of the marketplace, people are going to receive the rate rise better. I think the market has a chance to rally after that.
About this quote
- What does it mean?
- The speaker believes Fed policy aims to cool speculation before raising rates, allowing the market to stabilize and potentially rally afterward.
- In plain terms
- Rates might rise easier if the market cools off first, leading to a later rally.
- What can you take from it?
- Market stabilization often precedes rate hikes and potential recovery.
Where it applies
Putting it to work
Questions to consider
- How do rate hikes typically affect market sentiment?
- What signals indicate successful market cooling?
Another view
Predicting market reactions to policy shifts is inherently uncertain.
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