Inflation has taken hold of hard commodities.

Metal Market Report
Like it or not, our economy continues to slow down while inflation, in practically every tracked category is on the rise. The Fed notes released yesterday point out that the Fed is very aware of what is going on and in reading their notes, I think it clear that they are no longer, “behind the curve”.

The Fed realizes that there are substantial downside risks to our economy. Their primary tool to remedy this is the lowering of interest rates, which has a very nasty downside. Inflation!

What many find bothersome is that after all the rate cuts and the passing of the Stimulus Package; credit is still difficult to obtain, even for those deemed creditworthy. This needs to change. Once it does, part of the interest rate cuts we’ve seen or that will be soon made, will have to come “off the table”, resulting in interest rates increasing. However, let’s not get ahead of ourselves. At this point of the cycle we’re in, lower interest rates are expected. The markets have priced in another 50-basis point cut by the summer.(2/21/08)

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