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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (43790)	4/30/2005 1:12:30 PM
From: geode00	Read Replies (1) \| Respond to of 173976

When Federal Reserve Chairman Alan Greenspan and his central banking colleagues hold their next meeting Tuesday, they will confront a series of recent reports telling a tale of two economies. Even as the housing sector continues to soar, everything else about the economy seems to be just muddling along.... As a result, the Fed will almost certainly raise short-term interest rates another quarter-point Tuesday and probably again June 29 at the mid-year meeting of policy-makers. That would bring the benchmark overnight lending rate to 3.25 percent, compared with 1 percent when the rate-hike cycle began in mid-2004. Although the GDP report including an inflation reading that was slightly higher than expected, Faucher said noted that the Fed is unlikely to express concern because there is still enough slack in the labor market that there is little apparent pressure to boost wages. The housing market, however, is beginning to trigger more alarm bells. “It’s gotten more and more speculative,” said Ethan Harris, chief U.S. economist at Lehman Bros. “The housing market seems very divorced from economic fundamentals now. It does feel like what was a moderate so-called bubble forming in the economy has become a much-bigger disconnect.” Like many analysts who look at the market, Harris sees not a national bubble but a number of regional markets that are developing overheated conditions, including much of California, much of Florida and possibly parts of the Northeast...." msnbc.msn.com =======plus, fun with stagflation msnbc.msn.com "...Other analysts said the murmuring about stagflation reflects uncertainty about an economic recovery that often has been felt more strongly in corporate profits reported on Wall Street than in wage gains enjoyed on Main Street. "There always seems to be another shoe to drop,” said Jared Bernstein, senior economist for the Economic Policy Institute, a liberal think tank in Washington. He pointed to the “jobless recovery” of 2002 and 2003, which was followed by last year’s summer “soft patch,” concerns about U.S. structural imbalances and worries about another oil-induced soft patch. “I think what is weighing down financial markets now is this recovery has never really found its legs.” Bernstein pointed out that wages for blue-collar and other non-managerial workers have failed to keep up with inflation over the past four years since latest recession began. Hourly wages, covering about 80 percent of the work force, have dropped about 0.5 percent over the past year when adjusted for rising prices. “Stagflation is too strong a word, because it connotes very weak growth and very strong inflation,” said Mark Zandi, chief economist of Economy.com, a forecasting firm based in West Chester, Pa. But he referred to a “stagflation-type” atmosphere in which higher energy prices appear to be chilling the economy even as the Fed is battling a steady upward creep in inflation...."