>I must say I never expected to see this of someone who in the early 1980s
>used to criticize Paul Volcker for being an inflation dove...
Word is that AG is afraid of deflation, and is grateful that he ignored the hawks' advice to tighten throughout 1997. The source on this is JP Morgan's top Fed watcher; Morgan, known as the second Fed, is part of the bankers council that meets with the FOMC before their policy sessions.
The U.S. retail sales deflator is down 1.5% (March 97-98), only the second time in its 30 year history it's been negative for a while (the other in late 1986, after the oil collapse). Wages are rising but prices are flat or falling, which should pinch profits and cause distress among the rentiers. Will they tighten next week? Tom Dickens, you here?
Doug