Wall Street increase,the FED discount rate update

Stock Market News Today about the Wall Street Stock Exchange trading yesterday succeeded in strengthening thin, even after the Fed raised interest rates the discount rate, mainly because the CPI data are not as bad as expected. The Fed’s decision to raise the discount rate after the prior session’s close stirred market participants to dump stocks in pursuit of the dollar, but inevitably the dollar drifted lower and stocks managed to recover and finish the week with their fourth straight gain. Given that the Fed’s decision to lift the discount rate to 0.75% from 0.50% marked the first rate hike in one year, participants panicked a bit and made a knee-jerk decision to sell stocks.The Fed Expressed that its decision was not a signal for any change in the economy or monetary policy. Several Fed officials made similar, separate comments of their own about how to Interpret the move, but many seemed to ignore the notion that the increased discount rate was a tacit sign that the financial system is back on firmer footing.In conjunction with the announcement the dollar was pushed higher, such that the Dollar Index climbed as much as 0.5% to new multimonth highs and even broke through a key technical resistance levels that restrained its gain in the previous session.The greenback eventually rolled over and finished at a session low with a 0.5% loss against a basket of foreign currencies.

This entry was posted on Monday, February 22nd, 2010 at 01:31 and is filed under Market news, Stock Market, Wall Street. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.