Short-lived celebration on Wall Street

TEXT OF INTERVIEW

KAI RYSSDAL: Let me take you back to Friday on the program, we had a guy on and this is what he said:

DAVID JOHNSON: the Fed has absolutely no choice but to do the very honorable thing, and that is take a pass on hiking interest rates.

RYSSDAL: Here he is for his victory lap ladies and gentlemen, David Johnson down in Dallas, Texas.

JOHNSON: Well you didn't play the rest of it. You know, I was trying to win through intimidation. What we did is we said we were going to tear the Fed Building down brick by brick just like the Bastille if they didn't. But, you know, they did the honorable thing.

RYSSDAL: Yeah, but what do we do now?

JOHNSON: Oh yeah, that's a problem. Well we have to settle one problem at a time. You know, it's funny, if you looked at the market today, the knee-jerk reaction within 5 or 10 minutes right after the Fed announced that they were taking a pass for the first time in over two years, the markets exploded. The Dow was up 45 points, then it turned around and went straight back because, some of it is be careful what you ask for, you might get it. You know, in other words, declare victory, slow down the economy, but now we've got to deal with a slowing economy. So this is part of what the market's going through right now. I still think though, we have two parts here. On the one hand the consumer's slowing down, lord knows we're impacted by those high fuel prices and that slowdown in housing and the interest rates being ratcheted up. But on the business side, I still don't think that business has been impacted that much.

RYSSDAL: Alright, well we will find out more on Friday. I just wanted to, as I said I would, give you your chance.

JOHNSON: Oh yeah, if you want to look out six weeks from now, now that I'm on a roll. Maybe a 10 percent chance they hike.

RYSSDAL: Alright, living life on the edge, David Johnson in Dallas, Texas. Thank you David.

JOHNSON: Bye Kai.

RYSSDAL: The Fed's a democracy, even though we known only one vote really counts. Still, it's worth pointing out there was a dissenter today. Jeff Lacker, the president of the Federal Reserve bank in Richmond, Virginia, voted no on the interest rate pause.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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