All in all, the economy is not weak enough to warrant another rate cut. However, the Fed will give us one anyway. As always, the end result of excessive ease by the Fed will be higher rates in the years ahead.
More Quotes from Brian Wesbury:
Data are pointing to very strong growth in the fourth quarter. The pessimistic viewpoint, which has seen its grip on reality slip to the last knuckle in the past few months, is now holding on by its fingernails.Brian Wesbury
All of a sudden, this mystery of strong growth and low inflation doesn't seem such a mystery any more. This is exactly what the new economy is all about.
Brian Wesbury
This number is a one-month number. I would really be hesitant to make a trend out of this. If you strip out oil, these numbers do not look so bad and, especially in the producer price area, prices are still falling and this tells me that the pipeline does not have inflation in it.
Brian Wesbury
Despite the decline in headline producer price pressures, the risks of deflation have clearly vanished and signs of inflationary pressures have emerged. With the Fed holding real rates below zero, we expect producer prices to continue their upward trend in the months ahead.
Brian Wesbury
I believe the Fed is holding rates excessively low today -- current monetary policy is inflationary, ... they could scratch out 200 basis points over six months and have minimal effect.
Brian Wesbury
Once we get beyond two or three percent deflation, we have problems because we can't drive interest rates low enough and we begin to have unanticipated drops in prices.
Brian Wesbury
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