[ No headline ]

With interest rates coming down, analysts James Wooden and Jerome Baron of Merrill Lynch, Pierce, Fenner & Smith predict that the growth rates of the money-market funds will begin to peak. They note that during the spring to fall of 1980, a period of credit controls, the proportion of money-market certificates as a percentage of total deposits declined, while 2 1/2-year, variable-rate certificates increased as investors lengthened maturities. At the same time, the assets of the money-market mutual funds actually declined.

Mr. Wooden and Mr. Baron believe there have already been some positive signs, indicating a possible cyclical peak in interest rates. These include a recent slowing of the monetary aggregates; a decline in the prices of commodities considered inflation hedges; and a slowdown in corporate loan demand. Of course , there is another school of thought that argues that this is the trough before interest rates surge this fall.

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK