Hugh Johnson Rates Quotations

The worry is that the lid, or the cap, on interest rates is now off.

It's a reasonably accepted conclusion that the Fed will raise rates in both June and August; that's what the market has discounted. I don't know if Friday's employment report will change that, no matter what it says.

I think it's a bygone conclusion that they will raise rates in January, but there's also debate about whether they'll raise rates in March.

The market is worried that the Federal Reserve will continue to raise interest rates well into 2006 and possibly make a policy mistake. If you look at housing starts they're very strong. Everyone knows the unemployment rate is low and the Fed is uncomfortable with that.

I don't think it changes anything for Federal Reserve policy. Various early warning signs of inflation are still telling us they have to raise interest rates by 50 basis points and they are likely to do so when they meet next week.

The biggest risk in 2006 is that the Fed will be seduced by worries about inflation into raising rates too high. A lot depends on what the 10-year does and while I would hope that they would take notice that it's going down in yield, the question is whether they will take it seriously or dismiss it.

It was almost a sure bet that the Fed was going to raise rates in June. Now it's almost a sure bet, say 50-50 at least, that they won't move in June.

The stock market has been closely connected to the bond market in the last two weeks, and today's stabilizing interest rates is probably the No. 1 reason behind the gains.

Something has got to give, ... Crude prices will have to come down or there will have to be some assurance on interest rates before the market will be energized.

It's a migration toward value as a reflection that investors believe the growth rates of earnings are slowing. It will continue until investors are convinced that the Fed will take its foot off the break, or reduce interest rates.

It is a down week after some predictable profit taking following a strong January. But the excuse for that profit taking was the Fed. We walked away from last Tuesday's meeting in which they raised interest rates, knowing that they will likely raise rates again at their March meeting.

After seeing these reports, it's likely the Fed will...raise rates at the measured pace the market is used to.

The combination of a decline in oil prices, however slight, and some fairly upbeat comments (by Fed officials), may have led Fed watchers to conclude the Fed may raise interest rates at its meeting in May, and then stop.

If the Fed raises rates three times, they're not doing it just to have fun. Life is good.

The recent rise in interest rates has created some uncertainty about the bull market's longevity.

You know, we had four great years because we had declining inflation and interest rates. There's been a sea change. We now have inflation and interest rates actually heading higher. That makes things entirely different - you can't get away with high-priced earnings or overvalued stocks and so we're going through this adjustment to a new reality.

You won't know for a couple of weeks. History says they (the Fed) need to cut rates more than one time but I am encouraged.

This market is trying to rally. If the Fed reduces interest rates by 50 basis points, it will touch off a rally, but if we get a rally it will be guarded.

Long-term interest rates are low and I'd prefer to buy when rates are higher and more attractive. As a federal government issuer or taxpayer, I'd be excited but, as an investor, I just don't see the appeal.

Long term interest rates are higher now than they were in the second and third quarters, and debt levels are higher too. Yes, consumer spending will continue to expand, but it will be slower.

On the surface level it's a real simple story. Interest rates are rising and the outlook for the economy and earnings is darkening every step of the way.