John Ryding Fed Quotations

From the Fed's perspective, slack in the production sector continues to diminish, which should maintain Fed concerns about upside risk to inflation.

I think they'll hold unless we see some surprisingly weak economic data on the jobs front, which comes out on Friday. But absent that, I think the Fed is going to be tempted, having cut rates three times, to let things sit a while.

With the Fed maintaining an economic-weakness bias, Greenspan is more likely to be concerned with the signs of further economic weakness in this report rather than worrying about the increase in average hourly earnings.

We are going through a period of weakness in March and toward the end of February. And that relates to things like Japanese (fiscal) year-end and a few other technical factors. I think getting on the March 30 FMOC meeting, the Fed (will do) nothing that reassures people . . . and I think we set ourselves up for an April bond rally.

We see the funds rate rising to 5% by the May 10 FOMC meeting and we see an increasing risk of a 5.25% fed fund rate by the middle of the year.

There's no doubt there's political pressure on the Fed to do nothing on September 20th. The Fed will allow economics to overrule the politics of the situation.

There's no barrier to the Fed lowering interest rates significantly.

This means people will be able to go out and refinance their house where they may not have been able to do before and I think that we have to remember this isn't over. I suspect the Fed will cut rates again in November and that will continue to keep a lid on borrowing costs and hopefully will compensate for some of the lack of credit flows to corporations that problems in the bond market have caused.

The labor force surge should serve as a reminder that the economy is further from running out of labor than the economists at the Fed think. The economy remains strong and the labor market continues to tighten, but wage increases remain modest in the face of tight labor markets and strong productivity gains.

The management of communication here and the way things were said has, I think, undermined a little bit of Fed credibility for now.

The level of the stock market is always an issue for the Fed but I don't think it's such an issue that it's going to influence Fed policy.