I
i
months
of
1.978.
Leads and
lags
were a
major
adverse factor.
In
effect, airnost everyoce
who
vas
~oing
o
sell
doilzrs inezr!~y
1979
had
soid them
in
].ate
1978.
Thus
dollar
ratesstabilized ir: the firsc
weeks
of
J2cuirv
oore
on
the
lack
of
new
selling
pressure
than
iis
a
rrsu!:
of buyirig.
Trkinf
advanta:.
0-
of
the
o'c.lla+'s
better
cone.,
on
Janusr?
18
the
Buzdesbank
tcok
steps
cs
absorb
SCEE
ofthe
excess
liquidity
in
the
Gernan b~nking yste~
hrough
2
ti$hten<rg
pi
reserve
requirements
an.$
a
hfke
in
the
Lo~bs1-2
ate,
The
Sviss
2nd
.Ii?p,ai:c;~e
aut;:orities
2150
relaxei
some
sf
the
=ore
cnerc3s
birriers
to izflsxs offunds
vkich
rkej-
had
impose6
lest yesr.
T5e C?rman
cl;.cttar:;
psiicy
step
In
perticular
gave
us
al:
2
rez:.
?care,
but
tliz
2ctlizz's
resiliency
in
:kc
$:ice
rf
su:h
zcti~n
G?ZE
';3
in;r2ss
the
marker.
The
ne~r
;~rd;e
icr
the
market
xes
tiis
pres;<enr!s
5T6tC
cf
!?c
Lrion
adciress
and
budget
pre
sit::
foilow-up
testimony
by
senior
cificials, includingZh2irxs.r;
E:iller
a
Secretary Bl.um2nthal.
At
first,
tke
n;srket
reinained
skeptical
nhoct
the
~.essare orning
out
of
h'ashiiigton
01
austerity
in
:Iscal
policy
arid
rcsirsl.nL
ja
monetary policy.
But
reporrs
that
Congress was
perhaps in
a
receptive mood added
to
the credibility
of
that rressige.Moreover,
io
many
market
participants
here
2nd zbroad thefact that the Fejeral
funds
rate
remained steady even
after
some weeks of
weak
~onetary
ggregates
was
see^
as
tangible
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