By: Tom Watson
I recently noted a warning to take all of the hype around positive U.S. housing numbers with a grain of salt. It was issued by Robert Brusca, an always entertaining independent Wall Street economist who isn’t easily swayed by numbers. I am now posting again because Brusca just sent me a report via an email that read: “The trends are beginning to look friendlier for a widening array of reports. Look at consumer spending, income, the savings rate, Core PCE and U of M expectations and sentiment. Oh yeah.”
According to Brusca, optimism is still optional, but with inflation (CPI and PCE core) returning to pre-Lehman trends, Fed policy could get “real different, real fast.” Simply put, if deflation stops looking like a threat, the Fed will start back-tracking, maybe even at WARP speed.
Brusca has his own blog called GPS for Investors at http://robertbrusca.blogspot.com/
If you don’t think I am a total twit, follow my DOUBLE TAKE posts via my NotSOCRATES Twitter site at http://twitter.com/NotSocrates
DOUBLE TAKE: Aside from trying to promote myself while generating Web traffic that helps put bread and butter on my table, this blog aims to stir debate by taking a harder look at current news and events. I obviously enjoy voicing my own opinions, but I am a big boy and I welcome all comments that don’t require R ratings. So let me have it via this blog or send me an email at tom.watson@canadianbusiness.rogers.com. I reserve the right to post email comments without disclosing the sender’s name.
THOMAS WATSON is a Senior Writer and editorial board member at Canadian Business magazine. Since winning a community journalism award as a cub reporter with the Hamilton Spectator in the early ’90s, he has covered business, finance, politics and technology for various news outlets. Prior to joining CB in 2001, he reported on the steel and automotive sectors for the Financial Post. Watson received his first magazine award nomination for exposing a stock manipulation plot aimed at Waterloo, Ont.-based Open Text in 2000, when he was head of investor relations for an international venture capital outfit in the City of London. Watson holds graduate degrees in journalism, international relations and public finance and undergraduate degrees in history and politics.
2 Responses to “ Watch out for Fed hitting the brakes ”
I believe that inflation is still a long way off and that the markets will not get back to there highs of 2007 for at least 3 years,but thats my opinion.Thank you. Ralph
By Ralph Levine on Mar 28, 2009
I agree that the monetary easing will lead to inflation.
Perhaps the media could empahasize that today’s monetary actions may not impact the economy for 12 -18 months. A review of past actions vs present economic circumstances would make for interesting reading.
By Cyrus Barucha on Apr 3, 2009