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To: $Mogul who wrote (912)	6/24/2007 10:11:01 PM
From: SouthFloridaGuy	Respond to of 1718

Maybe inflation is here, maybe it isn't. Market based approaches to measuring inflation sure don't spell to egregiously high levels of inflation. Furthermore, I'm not sure how much power the Fed has to stop inflation in a globalized economy. Why should the Fed raise interest rates even further and slow down an economy that is already growing below trend because other nations choose to have low levels of rates and foster inflation? Given optimum growth levels and current market expectations for inflation rates, interest rates are right smack where there supposed to be. 2 3/4 real rate in a 2% economic growth environment sounds about right. Now where I would be worried is if housing contagion begins a series of cascading events which force the Fed to cut rates. But as of now, I don't see it, I think there is too much global liquidity which will eat up any distressed housing debt in about 5 seconds. Thanks to global growth and liquidity, what could have been a nasty situation is ending up looking like a perfect soft-landing for the Bernanke Fed.