As expected the FED ignored the recent CPI and PPI data…..  I will not change from what I said earlier today - today’s CPI data solidifies Bernanke changing the language at the next meeting.  He needs to remove his unsustainable and unreasonable policy that remains “exceptional and extended.”

We have used the term “pandering” to reflect the fact that the Federal Reserve is subjected to short-term political pressures to keep rates low.  FYI--the time to raise rates is now! 

The consensus expectations are convinced that there is no inflation worries building in the economy  and that rates will stay "exceptionally low" to keep the economic recovery on track.  However, it’s my belief that the CPI continues to run counter to what REAL people and business are experiencing.

Tomorrow Ben will be in front of congress.  A cynic would suggest that today’s FED statement did not contain anything inflammatory ahead of the confirmation process, and that he is just trying to get to the January meeting. 

Howard W. Penney

Managing Director