Dear Philip,

Seems there’s a break between Mishkin and Kohn that previously wasn’t there.
Markets are thinking Kohn supports a 50 cut and that he and Bernanke are alligned.

Today Bernanke may show whether he leans towards Mishkin, the co academic, or Kohn, more the practitioner.

Meanwhile, another ‘inflation day’ with oil and commodities up, $ down, and headlines like ‘Honda says no recession in US.’

All the best,
Warren

On 27 Feb 2008 09:09:43 +0000, Prof. P. Arestis wrote:
>
> Dear Warren,
>
> Many thanks.
>
> > Do you think Kohn’s speech indicates he’s ready to cut another half point
> > on Mar 18?
>
> I think the simple answer to the question is probably no with a question
> mark. I say this in the sense that before March 18 we will probably hear
> more about Kohn’s views, which may be clearer in terms of whether he is
> ready for another half point reduction. However, in terms of the analysis
> he offered in the piece you kindly sent me I did not see anything that
> suggested half point cut, although there is plenty in the piece to suggest
> that he is in favour of more cuts. I say this in that although he sees
> problems with the real economy he is also mindful of inflation, but he is
> not an ‘inflation nutter’ as some others are. So at this stage I believe he
> will go for a cut but not as much as half point.
>
> What do you think?
>
> Best wishes, Philip