Industrial Production rose 1.1% in April after a downwardly revised -0.6% in March. Capacity Utilization rose to a post-recession high of 79.2%.
The longer the Fed takes to normalize policy, the higher and faster that interest rates will ultimately have to rise to conteract rising inflation. Call me a hawk on this one, but I am just judging the Fed against a policy reaction function, that in the past two interest rate cycles, caused two massive bubbles to arise - first the Internet Bubble and then the Housing Bubble.
I wonder what Bubble will end up bursting this time around - because the Fed has fallen behind the curve once again. I am pretty certain that a Bubble has been formed in the Social Networking sector of the Internet and I expect the current overly accomadative Fed Policy to cause massive dislocations in Credit, Currency, and Commodity markets going forward. As the Fram Oil Filter commercial used to say "You can pay me now, or pay me later."