The new inflation data show what most people already know... Inflation is starting up big time.
The notion of "one and done" is now discredited... "One then some" is more like it.
I seriously doubt that the numbers will give Bernanke any room to stop raising rates this year...
If he would have the guts to do 50bp at one meeting...then maybe a pause could be worked in... In fact, that "brave action" would re-establish FED CREDIBILITY ...as NOT MERELY BEING THE STOOGE OF WALL STREET...
BUT BERENANKE SIMPLY DOESN'T HAVE THAT KIND OF COURAGE AT THIS POINT IN HIS BRIEF TENURE AT THE FED.
So...expect rate hikes of 25bp...at each and every FED meeting this year...
The "neutral rate" is probably around 6% to 7% on Fed Funds... And with an economy growing at 5%++...that's not really out of the question given the defict and dollar environments.
SORRY BOYS AND GIRLS, NO JOY ON WALL STREET FOR A WHILE...
BUT HEY, THERE'S ALWAYS THOSE "BROKERAGE UPGRADES!" ...LOL
