Last week, perception met reality on the economy and inflation….and reality won out on both accounts.
- The date released on the economy last week suggest that contrary to the perception that the consumer is dead and the economy is in recession, the consumer is alive and well and the growth rate of the economy is likely to have accelerated between Q1 and Q2 2008, due to a booming trade sector and suprisingly strong consumer spending.
- The pre-dominate concern in the financial markets last week was the fear that runaway inflation in the coming months would lead to draconian Fed rate hikes. The reality – is that there has been no discernable spillover of higher commodity and import prices into core inflation in the U.S.
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