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Hermes ACI chief economist encourages "careful observation".(front page)(financial markets analysis)(Brief article)

Business Credit

| March 01, 2006 | COPYRIGHT 2006 National Association of Credit Management. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

The potential for another increase in the Fed Funds rate, philosophical changes with a new Fed chairman, and a worrisome declining trend in the Credit Manager's Index (CMI) could impact business and economic conditions in the spring, according to economic analysis from Euler Hermes ACI Chief Economist Dan North. In reviewing the CMI, he said that the economy continues to appear reasonably strong--but shows a "worrisome downtrend." North expects that when the Federal Reserve Board meets again in March, new Fed Chairman Ben Bernanke will raise the Fed Funds rate by another 25 basis points. The move would provide an important signal to the economy and the financial markets about the Fed's dedication to fighting inflation and it would demonstrate a degree of continuity in leadership. "However, this forecasted increase ...

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