Thursday, May 25, 2006

It's the Economy, Right?

The economy grew by an upwardly revised 5.3% in the first quarter this year, exceeding economists' expectations.

So, why do you look glum? Because that means that the Fed will likely continue raising interest rates because of inflation fears and that they don't want the economy growing too fast.

And the housing market did something rather surprising too:
Somewhat surprisingly, spending on housing was moderately stronger than had been initially thought, growing at a revised 3.1 percent rate instead of 2.6 percent estimated a month ago. Fed Chairman Ben Bernanke told Congress last month that one of the reasons economic growth was likely to moderate in coming months was that housing markets were showing signs of softening.
The key thing to remember is that the media will only highlight how good the economy is now when the economy starts doing a lot worse down the road - if only to note in hindsight that things were much better.

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