We have a peculiar situation in which the shoppers seem to feel there is plenty to be cheerful about but the bond market is much more cautious.

My concern is that what's happened here is that inflation is higher than the Fed anticipated. On top of that, the kind of tightening already imposed by the markets, in terms of lower equities and higher bond yields, is setting up weaker growth in 2005.

To some extent, the bond market's trading pattern has not been resolved of late. This might provide some resolution, and I think it is going to be resolved in terms of higher yields,

These cross influences are confused enough that one has to stick with the broader trend that we still view as bond negative.

The Fed Chairman would be very happy if the bond market did some of the tightening for him,