May 11, 2006

I read the news almost every morning in the Washington Post, and there's something informative on every page. Today at the top of the economic news is "Fed Raises Rate Again; Now What? With 16th Straight Rise, Board Leaves Its Options Open"
By Nell HendersonWashington Post Staff WriterThursday, May 11, 2006; Page D01. (Why no link? Because the Post changes links often.) Especially interesting is the Trickle Up Effect chart showing relationships among interest rates. You can always find the latest official announcements at www.federalreserve.gov.

Last Monday, I attended the Shadow Open Market Committee meeting hosted by the Cato Institute. Yesterday's raise of the FFR was expected by the SOMC, and you can read the papers presented at http://www.somc.rochester.edu/ Most provocative was the paper by Anna Schwartz, who questioned whether the Fed has undertaken too many functions, incuding regulations, operations of payment systems, and the like. I ask, if the Fed doesn't do these functions, who would? Do you feel better having such functions performed an independent Fed or by some political appointees who serve at the whim of the President?

Also in today's paper and each Thursday, on page A02, Richard Morin reports on analysis and research in his Unconventional Wisdom column. He hosted some participatory experiments at his www.washingtonpost.com/richmorin site. Check it out!