What will the history books say?

When the history books are written on the great credit bubble and its crash, how will they depict the visual of the fate of the $14 trillion US economy and its 300mm citizens being largely influenced by about 20 men and women sitting around a large mahogany table in a building on Constitution Ave in DC? It will certainly be a best seller at the University of Central Planning. The first part of the FOMC statement today should be similar to the April meeting, acknowledging that while the economy is still contracting, it is doing so at a slower pace. Their comments in the 2nd paragraph on inflation will be more unknown considering the change in commodity prices and market psychology since the April. The highlight of the day though will be the 3rd part where we hopefully will get some more color on their QE policy, the answers of which will directly influence the short term action in the reflation trade. Durables and New Home Sales are also key today.

Peter Boockvar
Managing Director
Equity Strategist
Miller Tabak + Co.

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