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Annaly Capital Management, Inc. Message Board

  • hottrend2000 hottrend2000 Dec 2, 2004 2:53 AM Flag

    rate rise set to continue - WSJ

    Fed View Shifting
    On Inflation;
    Rate Rises Likely

    Jobs Picture, Weak Dollar
    And Energy Costs All Add
    To 'Upside Risks' on Prices
    By GREG IP
    Staff Reporter of THE WALL STREET JOURNAL
    December 2, 2004; Page A1

    A growing number of Federal Reserve officials believe inflation risks are on the rise -- a shift in sentiment that will likely keep the central bank raising interest rates at its next few meetings.

    Officials cite several reasons for their newfound concern: slowing productivity growth, the lower dollar, high energy and commodity prices, recent inflation data, and anecdotal evidence of businesses raising prices.

    The shift in sentiment means the Fed probably won't pause in its campaign to raise interest rates to a more normal level anytime soon, though that could change if November's jobs report, due out tomorrow, is disappointing. Financial contracts based on movements in the federal funds rate now put high odds on the Fed raising its target for that rate from 2% now to 2.25% at its Dec. 14 meeting, and to 2.5% in early February.

    The shift also will likely intensify debate inside the central bank over whether to alter its official assessment that "upside and downside risks" to inflation are "roughly equal." Several officials believe there's a

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    • So???--and old story already largely figured inthe price.Annaly has over 75% in Arms and 80% AAA. May make a small dent but managmenthas already prepped for this. A good time to hold and if one has extra cash on the sidelines to buy if it drops down below 17.5

10.08-0.05(-0.49%)Oct 21 4:04 PMEDT