One of the joys of going on vacation is the delightful indulgence of tuning out all the jabbering about whether Chairman Alan Greenspan and his Federal Reserve cohorts will have to make another preemptive strike against inflation at their next policy meeting, July 1-2.
Alas, returning to work, one finds that preoccupation continues. Friday’s evidence seemed to convince the market talkers that the Fed will refrain from raising short-term interest rates. The Labor Department’s employment report–138,000 jobs created in May, which was lower than expected, versus a revised 323,000 in April–reassured traders that the labor market still isn’t tight enough to sound alarm bells.
Bond prices jumped and, in turn, ignited a powerful stock market rally. The Dow Jones industrial average surged 130.49, to a record close of 7435.78. Other popular indexes also posted records. By Monday we would expect the euphoria to dissipate and nagging worries to reassert dominance.
