Just a quick note on how tough it is to gauge the true direction of the economy and inflation right now, care of the WSJ 's latest survey of economic forecasters:
Of 53 economists surveyed, 22 said the Fed should be more concerned by economic weakness than inflation, while 21 said inflation should be the greater concern. The rest said the risks were equally balanced, or declined to answer.
Uncertainty on rates simply piles on to a seesaw day for markets as financial turmoil continues to overshadow hopes that the financial crisis is ebbing.
With government-sponsored lenders Fannie Mae and Freddie Mac reportedly on the verge of insolvency, according to former St. Louis Fed President William Poole (via this Bloomberg interview), there are mounting signs that central bankers won't manage to shift away from crisis-management mode anytime soon.
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Rainer Ludwig 3:29PM July 12, 2008