Waiting For The Fed

Gold is up $10 and cyclical stocks are strong. Commodity stocks are up 1.5 percent as of 12:30 p.m. today. All this tells me is that no one is afraid of a quarter-point rate hike.

The rise in the gold price and the jump up in commodity stocks is not a good sign that a quarter-point hike will deflate inflationary expectations. I'd like to see some fear in the inflation stocks, but I'm seeing greed instead.

They need to make a statement. Bernanke's monetary manhood requires a strong statement.

I still believe liquidity neutrality is 5.5 percent on the funds rate, based on the Wicksell inflation-indexed bond market model. Meanwhile, low tax-rates and high profits auger for a solid economic growth performance.