Steven Wood Due Quotations

Retail spending was much stronger than anticipated. Although some of these gains were due to post-hurricane spending, it appears that consumers are not yet ready to throw in the towel.

Solid productivity gains are helping to restrain inflationary pressures. However, because the recent improvements are due to a dramatic reduction in work hours, they reflect the deep trouble the economy is in.

While a portion of this strength is due to unseasonably mild winter weather, it is obvious that higher interest rates are, so far, having little dampening impact on construction.

The spring slowdown in factory activity, due largely to an inventory adjustment cycle, is now history,

Although mortgage rates have declined over the past three weeks, mortgage applications volumes have continued to fall. This is partially due to the flat yield curve and partially due to tighter lending standards by financial institutions.

This drop may be more due to temporary factors like wet weather than the beginning of a major reversal in housing.

The narrowing of the budget shortfall in October is largely due to timing factors. Nevertheless, there is no apparent deterioration caused by the federal relief efforts following Hurricanes Katrina and Rita,

The Committee is placing more weight on current data releases and, therefore, less weight on forecasts of economic activity and inflation. What I'm foreseeing is that the Fed is going to keep on tightening due to the economy being stronger in the first half of the year.