Thursday, August 10, 2006

Interesting podcast from Jeremy Siegel

Knowledge@Whatron has a podcast interview with Jeremy Siegel on recent news ranging from the Fed's decsion to not raise rates to the Middle East to the Alaskan Pipeline.

A quick example:

"Knowledge@Wharton: After 17 consecutive interest rate hikes, the Federal Reserve decided on August 8 not to raise the federal funds rate. Joining us to discuss this recent decision is Jeremy Siegel, professor of finance at the Wharton School. Professor Siegel, thank you so much for joining us here.

After two years, the Federal Reserve Committee has decided, in a 9-to-1 vote, to leave the Federal funds rate unchanged at 5.25%. In your estimation, was that a prudent decision?

Siegel: Yes. That was the right decision. After last Friday's employment report showed considerable softness, the market moved to the expectation that the Fed would pause. It's very important in central banking that you meet the expectation of the market. "
BTW the transcript is also available for those who would prefer to read the interview.


Anonymous said...

"...very important to meet the expectations of the market." I wouldn't call that "interesting" as much as I would call that "down right awful". Are we suggesting that the fed simply watch the ticker tape and say what they see?

FinanceProfessor said...

Yeah, I saw that...which is why I grabbed that paragraph. I thought it might spark some controversey to say the least...

I think what Siegel meant was that the Fed should signal their intentions. If you read the next paragraph (or listen), Siegel says that if the Fed had wanted to raise rates, they should have told the market this prior to actually doing it.

I think.