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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (8718)	2/26/2004 2:37:50 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

We don’t see the justification for a 1% U.S. interest rate. In recent Humphrey-Hawkins testimony, the Fed seemed to foresee 5% GDP growth, 3% productivity growth, and the possibility of 4% unemployment. This rosy an outlook invites neutral interest rates rather than policy accommodation and, by the way, implies a sharp decline in the budget deficit. The problem is: I do not believe 5% GDP growth 3% productivity growth and I sure as hell do not believe 4% unemployment Anyone using those numbers for unemployment is on crack. If we achieve over 3% GDP I would be surprised. (annual basis) I am sticking with a call for a recession next year and those number just might look absurd by then. In fact I bet the author does not believe those numbers either but is using them to justify his position for a rate hike. If he does believe those numbers, then Bush might have a place for him as a PR spokesman. Mish Mish