Quote:
Originally posted by RoninLB
final paragraph
- low inflation, soft landing, and solid growth can't happen all at once.
- To eliminate inflationary expectations take the chance and raise rates. [which didn't happen today]
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Hard to say if this is true this time around, but I would have to agree. I don't have objections to a pause now, but I would prefer to see a strong stance against inflation. Inflation readings have been pointing flat to higher and today's labor cost/productivity numbers don't indicate a slowdown in the pressure.
On the other hand, there are definite signs of added stress in the housing market. Consumer debt is growing at a strong pace, and the employment numbers are flat to declining.
My belief is that reducing inflation to <2% core CPI would send the nation into a deep recession, and the government would not allow this to happen. Rate cuts by March of 07?
In my opinion, it's either crash and burn or inflate to great wealth. There is no soft landing.