Monday, September 18, 2006

No Further Tightening

Commodity after commodity is down 15 to 20 percent this year, most notably crude oil (-17%), gas at the pump (-16%), and gold (-20%). This shows that both inflation and inflation expectations are falling as a consequence of the Fed's tightening of the money supply.

So, it goes without saying that at Wednesday’s meeting, there will be no further tightening.