Fed predictions, hoo haw, et cetera.
James Grant thinks the Fed is through raising short-term rates and that the FOMC is willing to call it a day at 4.5%. Grant thinks Bernanke sees trouble in the savagely inverted yield curve, at least that's what I think I read in a stranger's copy of Grant's Interest Rate Observer. Of course Grant's rant preceded what Bernanke told Congress about the inversion, namely that the inversion reflects strong foreign demand for longer Treasuries, and so on.
Meanwhile the Brothers Lehman have raised their forecast for the Fed to 5.5%, anticipating four more quarter point rate increases. The Bros' analysts cite, among other reasons, a failure of housing prices to deflated as quickly as expected, for their new Fed rate target.
Paul McCulley sees some trouble ahead due to the Fed's hyper-anality.
And his PIMCO colleague Bill Gross sounds a bit pissed about all the liars and spenders in the Bush Administration, and urges investors to diversify globally. We're there, dude.