22 Sep 2006

Posted at 15:11h in The Friday Brief by
No one doubts the economy is slowing, but there is mounting debate as to how fast; will we get the “soft landing” that is hoped for or something more disruptive? Just a month or two ago the worry was that continued economic growth combined with tight labor might spark inflation. So far that has not happened. The most recent report of prices paid at the producer level released Tuesday showed a drop of .4%, well below expectations.

08 Sep 2006

Posted at 15:35h in The Friday Brief by
Everybody’s on hold; from the Space Shuttle Atlantis, to the Federal Reserve. While NASA hopes to launch today at 11:40 after a three year hold, we hope it will take considerably less time to re-launch the economy. The Fed has decided to hold further rate increases until it gets a better picture of the economy’s health. The Bank of Japan, the Bank of England and the Bank of Korea announced a similar strategy this week. Even OPEC is expected to hold oil production steady when they meet next week to see what happens. Doing so would help avoid a supply-driven run-up in prices. So the world watches the economic data to learn just how fast the US and the global economies are slowing.

01 Sep 2006

Posted at 15:40h in The Friday Brief by
Three weeks after the Federal Reserve ceased its 17th straight quarter point interest rate hikes debate continues as to whether they are finished, even among Fed officials. Minutes released from their latest meeting reveal that members expect core inflation “to decline gradually” and that pausing was a “close call.” Many believe that more increases may well be needed even while saying “the full effect of previous increases in interest rates on [economic] activity and prices probably had not yet been felt, and a pause was viewed as appropriate to limit the risks of tightening too much.”