Gentle Ben, Stocks Best Friend...

That’s the headline from Bank of America’s latest credit report. I’m sure its somewhat tongue in cheek, but it does characterize my view that the Fed is dissing inflation somewhat and is preparing to ease in order to deal with the subprime housing slump economic slowdown. This, even though inflation has puffed up in January and February.

The Fed is caught between a rock and a hard place. And they appear to have chosen the path of least political resistance by changing their policy statement to neutral. But neutral is in effect a de facto easing, at least from the standpoint of market perception.

From today’s Wall Street Journal: “A roar went up on the trading floor when people saw the Fed’s statement,” said Jon Najarian, a trader at the Chicago board options exchange.

Gentle Ben, stocks best friend…