Clearly the new paradigm is alive and well, ... While (Federal Reserve Chairman Alan) Greenspan downplayed the policy significance of CPI in his remarks last night, it is still a major positive for investors that core inflation remains benign.
We remain of the view that next week's rate hike will not be the Fed's last work this cycle. Indeed, they will likely eventually unwind all of last fall's crisis-induced easing.
The economy is in very good shape and people don't realize it. We really do have low inflation and low unemployment, and the economy has been growing at a rate of 3 percent or better since the last recession.