Each issue of PaperMoney is approximately 500 fact filled pages.
Logout
Click here for Pulp & Paper Radio International
Items just for you
New publication added! Advertising Arguments 2015 book
Free Downloads
Search
My Profile
Login
Management Side
Technical Side
A Pause
Print


It had become almost routine. For nearly two years running, the U.S. Federal Reserve Board raised short-term interest rates a quarter percent at a time—until 08 August, when it decided to hold steady at 5.25%.

This "pause" was expected by many analysts. The often-stated reason for the 17 previous rate increases had been to keep inflation in check. With a slowing of the housing market and the economy in general, another increase could have been counter productive.

The Fed suggested that it would consider future rate hikes if inflation again became a concern. Analysts generally believe the rate will hold steady through the end of the year.

For the paper industry, the pause may offer a slight incentive to make capital investments. (Of course the better opportunity was in the spring of 2004—before the hikes began—when the short-term rate was 1%.)

Of bigger concern, and more significance to the economy as a whole, has been the increase in fuel costs and various disruptions in supplies. In this issue of PaperMoney, higher fuel costs are cited as a factor in the closure of at least two mills.

With a different "pause" in the Middle East, oil prices are relaxing a bit, after pushing to within a few dollars of USD 80 a barrel in July. Perhaps, this too, marks a plateau—for oil prices and for interest rates.

In both instances, a season of decline would be welcome.






Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: