Friday, January 4, 2008

5% Unemployment Rate

Maybe now the Fed will get it. The weakness in the dollar is a function of the weakness in our economy, excaberated by the Fed's gradualism. As Iowa woke up the political pundits, this job number will finally awaken the Fed.

And as Obama's Hope, trumped the wife of the husband from Hope, this number finally trumps the Fed's fear of inflation, to the fear of an economy slipping into a recession who only belatedly recognize the deflationary spiral of declining housing prices.

That's what the bond market sees already. The Fed funds rate is at 4.25%, and the two year note is at 2.70%. What in the world is the Fed thinking?

Today, the market becomes even more scornful of the Fed. "They have no idea! They have no idea!"

No comments: