Saturday, June 30, 2007

Get The Door

The Fed kept rates steady at 5.25% yesterday.
“Readings on core inflation have improved modestly in recent months,” the press release stated. “However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures."
Translation: Beside food, energy and commodities, “inflation” doesn’t seem like a problem. But we’re not sure.
"So instead of the Goldilocks economy, which the Fed would like you to believe we have,” comments our friend Chris Gaffney, “we have an economy which is way too hot and way too cold!
“I can't argue with the nonmove by the FOMC, but I think the positive spin they’re putting on their actions is misleading. The economy isn’t in a 'sweet spot'; the economy has backed them into a corner and they can't move. Right now they are just sitting back and hoping the big bad bears don't come knocking!"

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