When and how much Those are the questions on the lips of investors, bondholders, and other Federal Reserve watchers. The Fed kept interest rates on hold at its Mar. 19th meeting. But the accompanying statement, in which the Fed abandoned its view that economic weakness was the greatest risk in the outlook, makes it clear that policymakers are thinking about the timing of rate hikes in order to bring monetary policy back to a neutral stance. Even so, there are other factors that argue for some rise in short-term rates—perhaps as early as June, as Wall Street expects. While the Fed"s words lessen the chances of a rate hike at the May meeting, they do not set the criteria for a possible hike at the June 25-26 meeting. The latest data seems to come down on the "evenly mixed" scenario. Businesses are backing off from last year"s feverish pace of stock-cutting, but domestic demand is holding up. Factories are busier in response to rising Orders. In particular, the makers of tech equipment are boosting output at a rapid clip. At the same time, the wider trade gap in January suggests that some of the inventory swing is benefiting foreign producers. Keep in mind that a bigger trade gap subtracts from economic growth, but a rise in U.S. imports is necessary to give rise to a global rebound. That will eventually boost exports as well and help to better align monetary policy around the world. The Fed"s decision to shift to a neutral stance was probably made easier by the latest good news on industrial production. Output at factories, utilities, and mines increased 0.4% in February on top of a 0.2% January gain, which was first reported as a 0.l% loss. Manufacturing output rose 0.3% in each month, the best showing since mid-2000. Surprisingly, the long-ailing tech sector is leading the charge. Tech production is growing at a double-digit annual rate in the first quarter, vs. almost no gain in the rest of manufacturing. But even that small rise in nontech manufacturing is a vast improvement from the steep declines of the previous six quarters. Just as tech is fueling the rebound in U.S. factory activity, tech imports are leading the import rise. Incoming shipments of tech goods jumped 14.6% in January, suggesting stronger capital spending. As demand picks up, the Fed will want to remove itself from the equation of economic pluses and minuses. Step One was the shift in its view of the outlook. Step Two will be a series of rate hikes that will bring policy more in line with sustainable economic growth. The purpose of the author in writing this passage is to urge the Fed
A. to incline to a tighter policy.
B. to put investment in tech-sector.
C. to consider possible rate hikes.
D. to abandon a neutral stance.
World oil production is about to reach a peak and go into its final decline. For years, a handful of petroleum geologists, including me, have been predicting peak oil before 2007, but in an era of cheap oil, few people listened. Lately, several major oil companies seem to have got the message. One of Chevron"s ads says the world is currently burning 2 bbl. of oil for every barrel of new oil discovered. Exxon Mobil says 1987 was the last year that we found more oil worldwide than we burned. Shell reports that it will expand its Canadian oil-sands operations but elsewhere will focus on finding natural gas and not oil. It sounds as though Shell is kissing the oil business goodbye. M. King Hubbert, a geophysicist, correctly predicted in 1956 that oil production in the U.S. would peak in the early 1970s—the moment now known as "Hubbert"s Peak", I believe world oil production is about to reach a similar peak. Finding oil is like fishing in a pond. After several months, you notice that you are not catching as many fish. You could buy an expensive fly rod-new technology. Or you could decide that you have al ready caught most of the fish in the pond. Although increased oil prices (which ought to spur investment in oil production) and new technology help, they can"t work magic. Recent discoveries are modest at best. The oil sands in Canada and Venezuela are extensive, hut the Canadian operations to convert the deposits into transportable oil consume, large amounts of natural gas, which is in short supply. And technology cannot eliminate the difficulty Hubbert identified: the rate of producing oil depends on the fraction of oil that has not yet been produced. In other words, the fewer the fish in the pond, the harder it is to catch one. Peak production occurs at the halfway point. Based on the available data about new oil fields, there are 2,013 billion bbl. of total producible oil. Adding up the oil produced from the birth of the industry until today, we will reach the dreaded 1,006.5 billion bbl. halfway mark late this year. For two years, I"ve been predicting that world oil production would reach its peak on Thanksgiving Day 2005. Today, with high oil prices pushing virtually all oil producers to pull up every barrel they can sweat out of the ground, I think it might happen even earlier. From the text we can conclude that the author
A. is sympathetic to Shell.
B. worries about the oil industry.
C. takes a neutral attitude towards oil industry.
D. is optimistic about the oil production.
World oil production is about to reach a peak and go into its final decline. For years, a handful of petroleum geologists, including me, have been predicting peak oil before 2007, but in an era of cheap oil, few people listened. Lately, several major oil companies seem to have got the message. One of Chevron"s ads says the world is currently burning 2 bbl. of oil for every barrel of new oil discovered. Exxon Mobil says 1987 was the last year that we found more oil worldwide than we burned. Shell reports that it will expand its Canadian oil-sands operations but elsewhere will focus on finding natural gas and not oil. It sounds as though Shell is kissing the oil business goodbye. M. King Hubbert, a geophysicist, correctly predicted in 1956 that oil production in the U.S. would peak in the early 1970s—the moment now known as "Hubbert"s Peak", I believe world oil production is about to reach a similar peak. Finding oil is like fishing in a pond. After several months, you notice that you are not catching as many fish. You could buy an expensive fly rod-new technology. Or you could decide that you have al ready caught most of the fish in the pond. Although increased oil prices (which ought to spur investment in oil production) and new technology help, they can"t work magic. Recent discoveries are modest at best. The oil sands in Canada and Venezuela are extensive, hut the Canadian operations to convert the deposits into transportable oil consume, large amounts of natural gas, which is in short supply. And technology cannot eliminate the difficulty Hubbert identified: the rate of producing oil depends on the fraction of oil that has not yet been produced. In other words, the fewer the fish in the pond, the harder it is to catch one. Peak production occurs at the halfway point. Based on the available data about new oil fields, there are 2,013 billion bbl. of total producible oil. Adding up the oil produced from the birth of the industry until today, we will reach the dreaded 1,006.5 billion bbl. halfway mark late this year. For two years, I"ve been predicting that world oil production would reach its peak on Thanksgiving Day 2005. Today, with high oil prices pushing virtually all oil producers to pull up every barrel they can sweat out of the ground, I think it might happen even earlier. The author uses the simile of fish and pond to explain that
A. new technologies can help in finding oil.
B. we should not search for oil only in one place.
C. oil can be reproduced like fish in the pond.
D. there is a peak point in oil production.
When and how much Those are the questions on the lips of investors, bondholders, and other Federal Reserve watchers. The Fed kept interest rates on hold at its Mar. 19th meeting. But the accompanying statement, in which the Fed abandoned its view that economic weakness was the greatest risk in the outlook, makes it clear that policymakers are thinking about the timing of rate hikes in order to bring monetary policy back to a neutral stance. Even so, there are other factors that argue for some rise in short-term rates—perhaps as early as June, as Wall Street expects. While the Fed"s words lessen the chances of a rate hike at the May meeting, they do not set the criteria for a possible hike at the June 25-26 meeting. The latest data seems to come down on the "evenly mixed" scenario. Businesses are backing off from last year"s feverish pace of stock-cutting, but domestic demand is holding up. Factories are busier in response to rising Orders. In particular, the makers of tech equipment are boosting output at a rapid clip. At the same time, the wider trade gap in January suggests that some of the inventory swing is benefiting foreign producers. Keep in mind that a bigger trade gap subtracts from economic growth, but a rise in U.S. imports is necessary to give rise to a global rebound. That will eventually boost exports as well and help to better align monetary policy around the world. The Fed"s decision to shift to a neutral stance was probably made easier by the latest good news on industrial production. Output at factories, utilities, and mines increased 0.4% in February on top of a 0.2% January gain, which was first reported as a 0.l% loss. Manufacturing output rose 0.3% in each month, the best showing since mid-2000. Surprisingly, the long-ailing tech sector is leading the charge. Tech production is growing at a double-digit annual rate in the first quarter, vs. almost no gain in the rest of manufacturing. But even that small rise in nontech manufacturing is a vast improvement from the steep declines of the previous six quarters. Just as tech is fueling the rebound in U.S. factory activity, tech imports are leading the import rise. Incoming shipments of tech goods jumped 14.6% in January, suggesting stronger capital spending. As demand picks up, the Fed will want to remove itself from the equation of economic pluses and minuses. Step One was the shift in its view of the outlook. Step Two will be a series of rate hikes that will bring policy more in line with sustainable economic growth. Which of the following is NOT mentioned in the passage
A. The U.S. economy is gradually recovering from the steep declines.
B. The Fed should take in account the shift in its outlook on economy.
C. It is not the proper timing for the Fed to consider rate interests.
D. It is necessary that the Fed make adjustments to its monetary policy.