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|Subject: Re: Implications of Fed pause||Date: 8/10/2006 2:25 PM|
|Author: jackcrow||Number: 17784 of 35400|
Wendy et al.,
One piece of info that was new for me is that since 1980 inflation has been a lagging indicator...in other words inflation has tended to peak after the tightening cycle has ended.
This creates the problem of knowing that inflation lags and dealing with a population of people who don't. The burning question for me is can the Fed and Berneke stand fast when political or market pressures are on. I'm not convinced that they will, Greenie and the gang had a mixed record on this issue.
Is it time to go long? . . . always a bit of market timing question. What we really need is a list of questions and a range of answers that help us discern a reasonable choice.
Is the Fed done raising rates?
Will international money continue to flow into the long end?
At what point does Federal deficit spending create surplus in the supply side of the equation?
Is the long end liable to remain stable, within 75 beeps, while the short end falls?
Is this up economic cycle peaking, peaked, over?
Everyone feel free to add their questions, this is by no means a comprehensive list.
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