By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – Let's imagine for a second that the economic recovery is a kin to say, a race - a marathon. The runners are at the line, the fastest are in the front and they're off. But wait, it's a false start. Something or someone faltered, and they have to go back. Finally, after many a tries, the race begins and this time the pace has been set. I'm Maxine Shapiro with KERA Marketplace Midday.
If anyone had the official right to say this time the recovery is real, it would be the Federal Reserve Board. And in about ten minutes, the Federal Open Market Committee will divulge their opinion on the current state of the economy. No one is expecting the Fed to move short-term interest rates. They're already at a 40-year low of 1 percent. And it's too soon to begin raising rates. That would be a sharp signal the economy is strong and right now we're still in the strengthening mode. Besides, the day of surprises by the Fed are long gone. A major shock like that could send us right back to the starting line. But what they say is important.
Greenspan and company are always careful about the words they choose. And most of the time they're misunderstood and a week later, we get a clarification. So will it be the same "cautious optimism" we've been hearing for the past year a half? Eventually they have to be right. Besides, could there be any safer a term? Just once I'd like to hear the term "optimistic" without the "c" word in front of it. I once read this great piece of graffiti: "If you're gonna walk on thin ice, might as well dance!" And in a way, Allan Greenspan has. Why, just this year I found myself applauding him many times for his gusty tossing out of past formulas. They weren't working in the current economic climate.
But this time, the stock market is up on some concrete earnings. Though I wouldn't be startled to hear a line or two expressing some anxiety about the technology sector and valuations. It's a little reminiscent of the 90's when tech stocks were much higher than the companies' value. And of course, the one issue that tripping up the whole race - unemployment. I'll be listening. 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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