The economy is coming out of, or may
be out of recession. Would somebody please notify the market? Positive economic news is becoming almost commonplace, but its market impact has been mostly counter-intuitive. In a bear market bad news is bad news and good news is sometimes bad news. Many of the favorable economic releases of late have been greeted with fears of inflation and higher interest. Yesterday, Jack Guynn, Atlanta Fed. President and non-voting member of Greenspan’s inflation police, knocked the wind out of the struggling market’s sails when he said that the Fed stood ready to raise rates at the first sign of inflation. The S&P 500 and the NASDAQ dropped 1% and 1.5%, respectively on his comments. If Mr. Guynn’s understanding his counterparts’ positions is true, then the Fed has learned NOTHING about the productivity miracle of the 90’s. I think they have and that Mr. Guynn doesn’t speak for the majority.
