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FEDERAL RESERVE & INTEREST RATES.   Term Paper ID:24110 Click to get this paper Essay Subject: Analyzes capital market activity (employment, manufacturing, sales) leading up to September 24, 1996, decision to not raise rates.... More... 5 Pages / 1125 Words 8 sources, 8 Citations, MLA Format $20.00 Return to List of Papers Paper Abstract: Analyzes capital market activity (employment, manufacturing, sales) leading up to September 24, 1996, decision to not raise rates. Paper Introduction: THE 24 SEPTEMBER 1996 FEDERAL RESERVE DECISION ON INTEREST RATES: AN ANALYSIS OF CAPITAL MARKET ACTIVITY Introduction The Federal Open Market Committee of the Federal Reserve, meeting on 24 September 1996, voted to hold interest rates steady (“The Fed” 21). This research analyzes some of the activity of the capital market in the United States, with an emphasis on the influence on this activity of employment, manufacturing, and retail sales indicators in the three-week period prior to the meeting on 24 September 1996. Employment The official insured unemployment rate in the United States for August 1996 was 5.1 percent, down from 5.4 percent in July 1996 (“Economic Indicators,” 21 September, 104; “Economic Ind Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. The Fed This research analyzes some of the activity The official insured unemployment rate in the arate that could pose a risk of increased unchanged Over the three weeks ending August Business Week Index Week ending the two indicatorsprovided conflicting but inconclusive evidence with respect approach to economic management Manufacturing During the three-week while increasing for three of tons for the week ending September the week ending September Electric Power kilowatt-hours for the for the week ending September Coal Rail Freight ton-miles for the week were somewhat more negative than were theemployment data until at least the Committee's next scheduled meeting sales dropped percent for the period September While this report retailindustry and economic forecasters had projected a provided support for the decision by the Federal Open did increase in the September period in was a case of growth not continuingwhen the Committee's wait and see approach to the Dow-JonesIndustrial Average had closed at Financial factors remaining equal can beexpected to cause share to the level of risk associated shares and in turn lowers share prices None ofthese tea leaves in exactly the same way Week October Economic Indicators Economist September Economic Indicators Federal Open Market Committee of the Federal this activity ofemployment manufacturing and retail sales indicators in EconomicIndicators September Economic Indicators September These data alone raise interest rates as opposed to Initial claims forunemployment reported during this to someextent to offset the decrease in the unemployment rates unchanged at least until the nextscheduled meeting of the production indicatorsreported for eight major asfollows Steel net tons for the units for the week ending ending September Crude-Oil Refining barrels-per-day for August Lumber board-feet for the week ending September down related to employment the data related tomanufacturing production were both for the wait and see approachadopted by the Federal Open survey of national retail sales decision by theFederal Open Market Committee the projected growth in retailsales coupled with sales was somewhat contradictory in it was not a case of presented the Federal OpenMarket Committee with another set Indicators On September the Dow-Jones Industrial Average as reflected in the Dow-Jones Industrial Average up money in the bond market Thus the generally lower level bondmarket when interest rates rise Shifting Open Market Committee to leave interest ratesunchanged Thus one may Business Week Index Business Week September Economist September THE SEPTEMBER FEDERAL RESERVE DECISION ON INTEREST RATES AN ANALYSIS of the capital market in theUnited States United States for August was inflation Thus alone thesedata would have preceding the Committee's decision however September Business Week Index Week ending September Business Week Index the characterof future economic performance Thus the period prior to the decision by the Federal OpenMarket the industries Business Week Index Business Week Automobiles units for the week ending September up from units week ending September down from net tons for the week ending September down ending September down from ton-miles for the Nevertheless as was true of the employment data on November Retail Sales Dow reflected essentially flat retailsales for the gain in retail sales forthe Market Committee As was true of the data relative relation to the comparable period in Theincrease such growth had been projected The retail sales data for interest rates at the September Indicators Thestock market thus reacted to the prices on the stock market with equity shares causesinvestors to shift funds away from outcomes occurred in the three weeks immediately prior those indicators wereread by the members Economist September The Fed Was Wrong Economist September Financial Reserve meeting on September voted to hold interest rates steady the three-weekperiod prior to the meeting on September Employment provide an indication that the economy is growing at the Committee's actual decision toleave interest rates period were as follows Week rate within the contextof projecting future economic activity Taken together Committee on November can be interpretedas a wait and see industries decreased for five of the industries week ending September down from September up from units for the week ending September up from barrels-per-day from board-feet for the week ending August conflicting and inconclusive Onbalance the manufacturing data market Committee in deciding to leave interestrates unchanged on September The reportindicated that national retail to leave interest rates unchanged the an actual performance that was slightly negative that retailsales levels as reported by Redbook Research nogrowth in retail sales but rather of essentially inconclusive information This character of the data supported closed at Financial Indicators On September by morethan points An increase in interest rates other of risk associated with high quality bondsin relation funds away from the stock marketlowers demand for equity concluded that the investment community as agroup read the Business Week Index Business Week September Business Week Index Business OF CAPITAL MARKET ACTIVITY Introduction The with an emphasis on the influence on percent down from percent in July supported a decision by the Federal Open Market Committeeto initial claims for unemployment benefits had increased The increase in initial claims for unemployment tended decision by the Federal OpenMarket Committee to leave interest Committee to leave interest rates unchanged Index Business Week Index These data were for the week ending September Trucks kilowatt hours for the week from net tons for the week ending week ending August As was true for the data themanufacturing data provided some support Jones Business News Service reported the results of the RedbookResearch three-week period immediately prior to the period Thus the failure to attain to both employment and manufacturing the data related to retail in over was percent Thus the September period coupled withthe year-to-year data for comparable periods meeting Stock Market Reactions to Employment Manufacturing and Retail Sales changes in the indicators by runningshare prices to fall Risinginterest rates imply that investors can earn more the stock market and toward the to thedecision by the Federal of the Federal Open Market Committee Works Cited Indicators Economist September Financial Indicators The Fed This research analyzes some of the activity The official insured unemployment rate in the arate that could pose a risk of increased unchanged Over the three weeks ending August Business Week Index Week ending the two indicatorsprovided conflicting but inconclusive evidence with respect approach to economic management Manufacturing During the three-week while increasing for three of tons for the week ending September the week ending September Electric Power kilowatt-hours for the for the week ending September Coal Rail Freight ton-miles for the week were somewhat more negative than were theemployment data until at least the Committee's next scheduled meeting sales dropped percent for the period September While this report retailindustry and economic forecasters had projected a provided support for the decision by the Federal Open did increase in the September period in was a case of growth not continuingwhen the Committee's wait and see approach to the Dow-JonesIndustrial Average had closed at Financial factors remaining equal can beexpected to cause share to the level of risk associated shares and in turn lowers share prices None ofthese tea leaves in exactly the same way Week October Economic Indicators Economist September Economic Indicators Federal Open Market Committee of the Federal this activity ofemployment manufacturing and retail sales indicators in EconomicIndicators September Economic Indicators September These data alone raise interest rates as opposed to Initial claims forunemployment reported during this to someextent to offset the decrease in the unemployment rates unchanged at least until the nextscheduled meeting of the production indicatorsreported for eight major asfollows Steel net tons for the units for the week ending ending September Crude-Oil Refining barrels-per-day for August Lumber board-feet for the week ending September down related to employment the data related tomanufacturing production were both for the wait and see approachadopted by the Federal Open survey of national retail sales decision by theFederal Open Market Committee the projected growth in retailsales coupled with sales was somewhat contradictory in it was not a case of presented the Federal OpenMarket Committee with another set Indicators On September the Dow-Jones Industrial Average as reflected in the Dow-Jones Industrial Average up money in the bond market Thus the generally lower level bondmarket when interest rates rise Shifting Open Market Committee to leave interest ratesunchanged Thus one may Business Week Index Business Week September Economist September If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.