By Maxine Shapiro, KER A 90.1 business commentator
Dallas, TX – Alan Greenspan and the Federal Reserve Open Market meet today. "Clarity" is all anyone wants. And for all that is expected, one would think Alan is revealing the meaning of life. I'm Maxine Shapiro with KERA Marketplace Midday.
The Federal Reserve Open Market Committee will make their announcement concerning short-term interest rates in about ten minutes. Not one economist expects a change in the 45-year low of one percent. We know economists are right this time. The Fed usually leaks if they're planning on moving the rates. The guessing game of recent years has been how low can they go. But it's what they say today that's keeping everyone on edge. Wall Street and big investors want to know when the Fed will start raising interest rates. And more importantly, what will the economic scenario be for them to take that action?
Forgive my flippancy, but how do they, the Feds, know what the future looks like? We can't even control our personal life expectations. We wake up; we plan this, this and that; and along comes a snag, a glitch, the unexpected. And everyone is demanding Alan to come down from the mountain and tell us what next year is going to look like. Just whip up some simple equation so all the risk of investing can go away.
Look at today. The Wall Street Journal reports, not only is the U.S. economy showing strength, but the global economic landscape is getting greener every day. And we can arrogantly say, and be right - the U.S. leads the world economy. But what about unemployment or the trade deficit? Plainly put by the Journal, "The U.S. is importing $1 million more per minute than it is exporting." In 2000 a study by the Fed suggested, "Imbalances of that magnitude can lead to negative side effects." So were they right in 2000 and wrong today?
But unfortunately, as Wall Street demands, so goes the market. And I guarantee you, at 1:16 today, half the economists will hear the answers they were looking for, and others will be disappointed. If this were a spectator sport, it would be interesting. Regrettably, it's not.
For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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