The Fed Reacting to Data

With inflation getting outside the box and commodity prices out of control we are seeing a Fed that is reaching its moment of truth.  Will Bernanke really follow the data as he promised when he was appointed.  It appears likely that he will have to say something this week in his testimony that implies that we may be near or at a pause in declining Fed fund rates.  If that occurs we will see one more test of the 1340 area on the S&P before we bounce higher again.  Bottom line, with 1385 hit, short-term risks in being long are high at this moment.       

2/26/08  12:32 PM

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