Market Forecast

So far 2006 is looking good but can we head way of life into a recession? In looking at history, we should redeem in mind that stocks tend to discount the future and we shouldnt buzz off any absolute judgments on which way prices will go based on the past. And as such, we shouldn?t jump to the death that it will be up, up and away once the supply says its done. A more important consideration would be the perspective of the business climate and the sparing when the fed rings the wholly done bell. So, as usual, there is no easy way out and well having to keep our eye on the ball.

let?s see if I can try to make out this. There is a saying don?t involvement the fed ever. Nevertheless, the bond market seems intent on doing fair that. In one corner, key bond players believe the economy is slow up and inflation is not a threat, and the fed is most done raising evaluate. in the other corner, fed policymakers surface to favor a more aggressive approach to lifting rates in order to contain inflation and find it pose that the bond market and long term rates atomic number 18 resisting the feds lead. By historical standards the 10 yr put up should be in the 5-6% range. Market rates that low be at cross purposes with the feds goals.



Policymakers are lifting short rates from levels that are palliate too simulative to growth and inflation. However, credit remains for now freely available in the financial markets. Mortgage rates are only now approaching 6%; strangely, none of this seems to disturb the bond market. In particular, bond folk point to the flattening of the yield curve is a traditional sign that the economy is slowing down. But keep in mind currently 10 yr...

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