Two economic articles on Yahoo - WTF?

Eventual Rate Hike May Boost Stocks

NEW YORK (Reuters) - Higher interest rates may remain far off on the horizon, but when a rate hike does come it could be good for the U.S. stock market, analysts said.

Even with growing signs of an improving economy, inflation is still low and the Fed remains on the sidelines, at least for now. Market analysts do not expect the U.S. Federal Reserve (news - web sites) to raise rates before the spring or summer.

When rates do go up, the effect should be neutral to the market, as long as it addresses the inflation rate in the economy.

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Stocks and Dollar to Get Saddam Lift
By Jan Paschal

NEW YORK (Reuters) - Saddam's capture will inspire stocks worldwide to rally when trading opens on Monday and lift the dollar, while U.S. Treasury bond prices may slip if investors flock to stocks, analysts said on Sunday.

But the capture of Iraq (news - web sites)'s former President Saddam Hussein (news - web sites) by U.S. troops, who found him hiding late Saturday "like a rat" in a hole near his home town, won't help gold.

Gold prices are likely to drop, especially if the dollar rises, as expected.

Crude oil could slide, too, from its New York close on Friday just above $33 a barrel as investors consider the prospect of a potential increase in supplies from Iraq, a major oil producer.

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So an increase would mean there is some life in the economy.

And the Clinton years had a great stock markey with rates much, much higher than current rates.

But the key thing is that the current state of the economy determines only 95% of the 10 year rate. There is a range. And the current expectation for Gov debt - the deficit - puts you high or low on that range. Granted it is only a few basis points - and therefore only a few projects - and a few dollars - but the feedback from more capital investment approved by companies is compounded over time.

Good grief - it is like the econ world has forgotten all the research that was done in the 70's and 80's as Black & Schole formula research was hot (I know options are not on point - but we looked at feedback concepts and expectation concepts and tested versus Markov!).

in anycase "Eventual Rate Hike May Boost Stocks" is bull - if they mean rate hike causes boost.

raising rates shouldn't boost stocks - it should be the other way around - an improving economy leads to increasing rates...