We know from low inventory levels that they're going to have to rebuild inventories as economy strengthens,

We think the economy will grow stronger for longer than the market and the Fed do. We look for substantial further tightening to be required.

The question now is what impact the hurricane has on the economy and for how long.

The stock market has been pretty stubbornly hewing to the idea that the economy is slowing down and the Fed may stop soon. So to the extent that people perceive the statement as a little more hawkish, it's maybe upsetting.

It is still far too soon to say how the economy will respond to Katrina, but so far, so good. Things are improving so far about as quickly as could be expected.