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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (15527)	6/1/1999 8:27:00 PM
From: Daniel Joo	Read Replies (1) \| Respond to of 99985

IMO, the impact of the strong consumer spending has hit a point where their/our consumption is impacting inflation numbers. As I've stated in earlier posts, the recent wage numbers seem deceiving - IMO, people have seen substantial increases in spending power driven by not only low inflation but also higher wages than what is reported. The fact that the airline industry has been able to substantially raise airfares and make them stick is one sign of this - I believe that in the past, they've had to eat increases in oil prices and/or face declining passenger numbers. I suppose that one can point to the computer industry and point out declining prices but it's one sector - the recent CPI number indicates rising prices despite declining prices in computers. The Fed seems to be worried about inflation above 2 - 3% - it doesn't take much to hit that number. I believe that the Fed has to slow down consumer spending to keep inflation down - one quick way to do that is to raise rates. My worry with my current short positions was that the Fed was more preoccupied with keeping the stock market bubble going versus keeping inflation at bay. It appears that they are more concerned about inflation at the risk of a correction in the market. BTW, anyone know when Columbia Inflation Index is reported - my understanding is that the Fed follows this indicator more closely than the CPI number - apparently this indicator has been up the last 2 to 3 months. Dan