Stocks Fall on FED Worrying!!!

The Nasdaq is at a 5-month low and the Dow is down over 100 points on worries from the Federal Reserve about higher prices. This is yet another clear signal that the Federal Reserve will continue its rate hikes into 2005. While rate hike increases were expected, the Federal Reserve's concerns about inflation are troublesome for Wall Street. The biggest concers noted in minutes released from the Federal Reserve Meeting on December 14, 2004 were the weak dollar, and high energy prices.

The weak dollar has been a boon to companies who export American products, but it has far more reaching effects. The biggest to note is the fact that Americans will soon start paying higher prices on imported products from televisions to cars. This will hurt the American economic recovery, because it means less money for Americans to spend, and less profits that flow to the bottom lines of companies, which boost stock prices, and ultimately increase the wealth of American investors.

For more on this story see the following articles:

Market Watch - Markets Drop

Market Watch - FED Minutes

CnnFn - FED Coverage

CnnFn - Market Sell Off

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