FED is dealing with a rate setting today. There is a prevailing opinion that rate will stay same 5,25. But why are Americans changing this rate and why is the whole world trembling? This rate is one of not many tools which is used for injecting more gas into engine of American economy. Or to choke up when the engine is too hot.
Situation today is a result of several last years when the FED has decided to choke economical machine working so hard that it could brake apart by injecting more and more gas (money) . And so FED has decided to raise the price of fuel (money) so that a driver could not use the fuel so extensively. Driver will have to bring up the fuel accounts to his boss at the end of a shift (when the fuel was cheap the driver did not care).
The FED decides today if the pipe with money will be opened, closed or will stay in unchanged position. There is almost an unopposed opinion that rate will stay unchanged. So why are all so eager to watch it. Because they will try to find the trend from the wording of the FED chairman. And the trend is our friend as we know from our investment teachers.
And next article? How does the FED know what the right temperature of the engine is?
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