Fed to continue increasing interest rates

According to CNN Alerts, "Greenspan: Steady economy, but more rate hikes coming."

The fed is afraid of inflation, so they are going to keep jacking up interest rates, probably at a quarter point a month as they have for the last nine months.

This may cause the localized housing bubbles to be reduced or stopped. But it is NOT going to be good for employment. As Paul Krugman recently pointed out, the reason that unemployment is at a mere 5% is that so many people have simply dropped out of the workforce. Labor force participation is down. The economy is not hiring more people.

Politically, we can probably plan on a loosening of interest rates early in 2006 and 2008 because high unemployment will be blamed on the Republicans as the party in power. That's what the fed has done in 2000 and 2004. That is a part of the unitary national Republican Party I have been discussing. Greenspan is loyal to holding down inflation and electing Republicans, little else.

Don't look for an improved economy until next Summer, and if the Republicans retain Congress the interest rates will start back up and the economy will be stifled again in 2007.

Except for the CNN info, this is pure opinion, of course.