RUBBER CHICKEN PRICES SOAR!

BOND YIELDS JUMP!

FEDERAL OPEN MARKET COMMITTEE MEETS NEXT TUESDAY

There were no major economic news releases today. I knew this beforehand; but, just to make sure, I scoured the news services to see what was happening. Always vigilant for new indicators, I discovered a story describing how, year-over-year, the Cost of Laughing Index had risen by 3 percent -- just a tad more than the annual rise in the Consumer Price Index. Leading the rise was the cost for a dozen rubber chickens -- up a whopping 10 percent from a year ago.

Bond traders responded typically, bidding the yield on 30-year T-bonds up to 6.65 percent. This broke a five-day downtrend. Regardless of today's uptick, the long bond yield is still well below the near term high of 6.75 percent set a week ago.

Next Tuesday the Federal Reserve Open Market Committee will meet to assess the status of the economy and decide whether to introduce additional stimulus in the form of lower short term interest rates. Fed Chairman Alan Greenspan has repeatedly stressed the importance of keeping inflation in check. And, he monitors a number of different indicators to keep track of the status of price changes. Let's hope that he hasn't noticed the recent action in the Rubber Chicken Index.

Byline: Lafferty (MF Merlin)