With lots of tough talk, Fed can drive down the stock market, where a lot of inflation is hiding in plain sight. Then, at June meeting, they can hike .25 without tanking the market, and also announce that there will be a pause. Then the market can rally, nervously, back up for the election.
bale I totally agree with your statement. I think they hike .25 and then say they will back off for the next meeting. That way they look "tough" on inflation, yet the market can breathe a sigh of relief and rally. The Fed can have their cake for and eat it too, at least for the time being.
that's a thought, bal. one thing though, housing is already collapsing....another .25, coupled in with the accelerating impact of last 16 increases, i don't know that the economy will be strong enough to continue a rally into the fall. we'd be more likely to dribble into the fall, with a downward bias.
but that may be the best we can do.
on another note, did you love that greenspan's testimony before the senate foreign relations committee today was carried live by Bloomberg, and headlined on CNN.....Ben's not filling his shoes. and if he isn't careful, he's going to be pushed aside.