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I hadn’t noticed (until an emailer pointed it out) that Barron’s picked up So much for "One and Done"
Fed Head Fake: One and Done?
March 28: So much for "One and Done." In raising rates the expected quarter- point, the Federal Open Market Committee announced that they are likely to keep increasing short-term rates for the next few meetings. They threw a little bit of a head fake in there, noting, "Economic growth has rebounded strongly in the current quarter, but appears likely to moderate to a more sustainable pace."
Traders who left their feet on that were disappointed. By itself, that statement might have been a sign that the Fed was all but finished — which would have been the fuel sending the bulls racing to new heights. A moderating economy on a glide path to a soft landing would not require additional monetary tightening.
But as George Mason University taught UConn, you have to play to the end of the game. In FOMC terms, that means reading to the end of the statement, where they shifted their focus to energy prices, noting the "potential to add to inflation pressures."…Like the Huskies, the One and Done Squad is now eliminated from contention. Better luck next year.
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Source:
MARKET WATCH
A Sampling of Advisory Opinion
ANITA PELTONEN
MONDAY, APRIL 3, 2006
http://online.barrons.com/article/SB114384838268514067.html
