I know you should never take what a central banker says at face value, but still. Today Christopher Swann in Washington tells us (in an article entitled: End in sight to the Fedâ€™s rate-tightening cycle – and with no question mark):
For much of the past year and a half the Fed has been running almost on autopilot, with rates being raised from their historic low of 1 per cent in June last year to 4 per cent now in a lockstep of quarter-point moves. None of the economic vicissitudes over the past 18 months â€“ from Hurricane Katrina to surging energy prices â€“ has diverted the Fed from its gradual task of bringing rates to a more neutral level.
But this weekâ€™s minutes suggested in the clearest language yet that this task is almost done. In 2006 any further rate rises will have to be justified by surprising economic data, the Fedâ€™s internal discussion appeared to indicate.
For the first time since the rate-tightening began, some of the members of policy-making committee also warned about the dangers of going too far
Meanwhile, back home in the UK, Steve Johnson has this:
“In contrast to the ECB’s caution, comments from the US Federal Reserve hinted at several more rate hikes to come.
Michael Moskow, president of the Chicago Fed, suggested that the Fed funds rate would rise above the “neutral” level expected by the market. “With inflation at the upper end of my comfort zone, an unexpected increase in inflation would be a serious concern.””
So come on lads, get your act together, which is it, almost done, or plenty of juice left in the lemon yet awhile?