Lara Rhame Fed Quotations

When we started the year, the markets were reticent to buy into either a strong U.S. economy or the Fed raising rates to 5 percent. What has changed is the market's very stubborn resistance to accepting the fact that the dollar has a pretty high carry compared to the rest of the world.

Most people at the Fed seem to feel that the national economy is strong enough to absorb the effects of Katrina. That to me seems that you will not see the Fed rate hike derailed.

Given that the economic data will be strong, people will wonder why the Fed is not moving, which could cause some volatility in the markets. But we think the Fed will remain on hold for quite some time.

Market expectations have priced a rate cut in. When markets are pricing it in like that, the Fed can't afford to give a downside surprise in this environment.

This whole question of the impact on interest rates is really complicated, but a lot of smart people at the Fed and elsewhere have said it's not really a big issue -- it's only suppressing long-term interest rates at the margin.

We are seeing a slowdown, but we're not necessarily seeing a slow economy, ... The Fed is still going to be on alert for inflation, and we're going to have to wait and see more evidence before we can conclude that it isn't a threat.

We are seeing a slowdown, but we're not necessarily seeing a slow economy. The Fed is still going to be on alert for inflation, and we're going to have to wait and see more evidence before we can conclude that it isn't a threat.

People's outlook for the economy changes much faster than the underlying state of the economy. The Fed tries to keep its eye on the larger ball and not on the ping-pong ball of the stock market.

This really puts the spotlight very acutely on the Fed minutes this afternoon.

This is not a 'ripping off the Band-Aid' kind of situation, where you know how much the pain will be and that you'll be fine afterwards. We don't know how well the economy has healed. The Fed remains very concerned ... that they might overshoot and give the economy such a shock they'll have to cut rates again.

The 'new economy' was a new beast to some extent, and the Fed was too lenient in terms of letting consumer exuberance get ahead of itself. They should have been moderating growth in 1997 and '98.

The consumer is the last support here, and it's not getting any help. The savings rate plus the confidence plunge add up to enough reasons for the Fed to give consumers a psychological boost.

The Fed really comes in in situations where the capital markets stop functioning. This not that situation. They're functioning just fine -- they're just really negative.

You can really think of productivity as magic fairy dust to sprinkle over growth to allow growth without inflation. That's really the way the Fed sees it.

It's not in my forecast, but it's probable, a quarter from now, if we're sitting in the same place we have been, with some uneven signs of recovery, but no real improvement in payrolls and inflation edging lower -- those are the conditions under which the Fed has cut recently.

Everybody has to learn a little more economics than they want to learn, now that we're drawing more and more of a distinction between actual GDP and final domestic demand, which is GDP minus inventories. Inventories can surprise. It's hard to make a solid forecast about them, and the Fed said that. I think the market continues to overestimate Fed rate cuts.

The report is certainly better than in December, but it just doesn't reflect the level of job creation we'd expect to see at this stage of the economic recovery, or the job creation the Fed would need to see to even consider taking that first step towards tightening.

The report was dollar positive. With the combination of solid data for the headline and what looks like increasing price pressure, that means you are going to see U.S. yields continue to rise and the Fed continuing to raise rates, both supporting the dollar.

There's a growing effort within the Fed to look for other ways to add liquidity into markets and to sustain the interest-rate-led growth we've had. I think they are going to move to a bias to ease policy again, but I'd look for the ease somewhere else. It won't be a rate cut.

I don't see the scope for the ECB to match the Fed in terms of raising rates and this will continue to support the dollar. The ECB tends to lag the Fed and even if they hike, the yield differentials are still favorable to the dollar.

I don't see this as an inherently dollar-positive statement. We'll see much greater uncertainty around the Fed at least until the next meeting because this statement is so flexible.

I don't think there is a tremendous amount the Fed can do, but they can't stay on the sidelines. Unless the data stream improves, they have to cut rates.

For the Fed, productivity is the antidote to inflation, and that's still very strong. It's inconceivable that the Fed would tighten in four out of its next five meetings.

The market reacted exactly the way they wanted it to, which was to flatten the yield curve. I think the point is clear: Policy makers are going to do whatever they can to help the Fed. The rate cuts that the Fed is putting through are only hitting the short curve; they're only psychological.

The markets are trying to put this data in the context of how scared the Fed is by it. It's very difficult to see exactly what the Fed views as a continuation of last year's trend of broadly declining price pressure and what the Fed sees as a substantial decline.

The markets have probably been too quick to connect the dots from the current slew of good data straight to a Fed rate hike,