The dollar rally of late coupled with the red hot new home market IMPLY that the Fed will now be ready to go 50 bp and abandon the "measured pace" scenario.
Will Greenspan have the "guts" to hit Wall Street with a 1/2 point rate hike as in days of old?
Surely, the dollar drop is behind the run up in gas prices.
And now the run up in the dollar is caused by the red hot house bubble that is still unfazed by the Feds efforts so far.......
The US economy is sending mixed signals as confidence falls and inflation seeps into the system. So it may be time for Greenspan to GET REAL and SHOCK THE MARKETS with a now rare 50 bp move.....THAT might "cure" high gas prices, the dollar and inflation in one fell swoop!
Of course, there are trade offs.....bonds would fall a bit and the stock market might not see the immediate benefit of allowing Mom and Pop to "escape" from Wall Street and "go back to the Bank CDs....." But this is the tangled position Greenspan has created for himself and the US economy........
