Overheated Economy

The GDP numbers are just in: 4.7%. Enormous growth.

This is the United States, not China in 2005. We're not supposed to grow like that. And if we are, then something is "wrong," as in "too good." We're growing at an unnaturally fast rate, and bad things then likely come of that overheating. We get inflation. We get bubbles. We get wild and crazy things in the markets. So we're going to need to cool the over heated economy by raising interest rates. We'll take away liquidity by sopping up all the excess cash we can that's out there by issuing a bunch of bonds. And then there's adding reserve requirements to banks so that they don't have as much dough to lend.

Lots of dials for the Fed to turn. So little time.