The U.S. financial markets faced monetary policy reality in the third quarter of 2005. Despite the passionate pleas of those addicted to loose money and low interest rates, the U.S. Federal Reserve persisted in its normalization of interest rates. Alan Greenspan, the Fed Chairman, continued his “measured” program of short-term interest rate increases with two quarter percent increases in the Fed funds rate from 3.25% to 3.75%. This moderate pace was met with horror and disbelief by economic and market professionals. “The economy slows”, they protested. “How could you?”
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Canso 2005 Q3 Market Observer
