July 24, 1998

In July, 1990, 10-year Treasury rates were about 8.5%, today they are around 5.5%. Over the same period, the S&P 500 has risen to roughly 1200 from 800. All of which tells us that interest rates matter, and during a time when investors are getting nervous about the heights the market has climbed to -- particularly in light of falling earnings estimates -- those lower rates may be just what the market needs. Now, after listening to Federal Reserve Chairman Alan Greenspan earlier this week, a betting man would probably say rates are not likely to head too much lower, but falling interest rates have their benefits.

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