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November 14, 2005
Monotony of Fedwatching?
Tim Duy wants to avoid being complacent, but feels like he's stuck in a rut.
Little has come to my attention in the past couple of weeks to change my underlying outlook – the Fed will continue to raise rates until they see a clear shift in real activity. In this case, “clear” means “evident in the data,” not anecdotal evidence...
He and I are also on the same page regarding the housing bubble.
Elsewhere, Calculated Risk and Buttonwood are very worried that the Fed will overshoot. With the real fed funds rate still very low, I'm not in the overshooting camp... yet. But can I forsee scenarios that would cause me to switch camps? Yes. The 4th quarter numbers will go a long way in suggesting to me where we are with regard to the overshooting scenario.
But that's just it, isn't it? Waiting for the next data point, letting the inertia build. When I said that I had been more worried about policy error a several weeks ago, does that mean that I'm getting complacent now? Hopefully, raising the question will remind me not to become complacent in the coming weeks.
And so begins another week. Will it bring more of the same?
Posted by William Polley at November 14, 2005 12:54 AM
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Comments
Being complacent or neurotic is always a delicate question when one camp perceives panic and the other, brain-numbing monotony.
Not another 25bp forchrisake or I'll need clothespins attached to my eyelids to sustain my pretense of due attention. Save us from the measured monotony.
Or so says the camp that is not arising to those cries ["Arise arise, the rats are in the pies"] from the other camp that sees more of the housing bubble than the economy.
To arise or not. ["I shall not arise"] That is the question. The HELOCs, a financial instrument, provided us with an extension of the housing market and the economy in general.
We non-risers await the next financial instrument to continue in our imperturbable ways.
Posted by: calmo at November 14, 2005 12:34 PM