Diane Swonk Quotations

We are at a time in the cycle when you don't need to just turn down the flames on the fire, you have a pot that is already boiling. What the Fed is concerned about is that even as you begin to turn down the flames that pot will still boil over.

We're more productive than we were in the 90s and frankly we didn't start hitting wage pressures in the 90s until about a 4-3/4 percent unemployment rate.

very bad indicator on whether or not people feel secure about their jobs.

We have seen a softer tone in their write-ups. I think there is a real sense that the Fed is going to stay on the sidelines.

More and more retailers are feeding on a smaller consumer pie, and many are going away hungry, ... What Wall Street Wants from the Retail Industry.

obviously something that (the Fed) is trying to stretch for, saying, 'Well maybe people aren't trading job security for wages anymore.'

If they move between meetings it's usually a move to shore up confidence.

If they see more instability in financial markets, they will take it lower.

(Bush) has got to be even more careful today. He has burned through a lot of political capital. He's got to put someone in who is going to be a slam dunk.

I don't think we're gong to get any more at all.

Given the obvious hardship of having illegal aliens flooding in, we also know they are critical to the functioning of the U.S. economy. To be turning our backs on people who want to work is kind of silly in an environment where you've got tight labor markets and we're getting older and need younger people to work.

If it was going to be one of them, you would have thought they would just move forward.

If we are in an economy that is weakening ... that's not good for profits.

He's certainly opened the door to another rate cut.

He has faced many different kinds of economic environments. He has thrown away any kind of rule of thumb.

He'd like to bring in inflation targeting. (But) he must build consensus to do so and he doesn't have consensus now. I think he's going to make a smooth transition, but it's going to be an evolution in policy change.

kick back, put up his feet for a bit and not have to carry the burden of keeping the economy going alone.

It adds up on paper to look a lot better than what it feels to people, ... not as many people are sharing in the economic gains.

I think it does encourage flight to quality, temporarily, but actually I think once we get beyond this point, there is a deadline here, ... December 12th is a deadline out there looming not very long away, and I think that once we get beyond that point we really will see this as little more than a blip in the radar screen, as much as it seems like a major event in the moment for the markets. But it's not part of the fundamental economy.

It confirms that the Fed is almost done. Those looking for higher rates are not looking at the economy the same way as the Fed.

I think the market is tired of Christmas. We've already seen the Christmas reports. As far as the market is concerned, that's old news.

I think you have to take the January numbers with a bit of a grain of salt. Consumer confidence is still quite strong and I think we'll see at least a partial recovery in activity in February and through the spring.

Retailers ordered extremely conservatively for the holiday season. The shelves aren't overly abundant with goods, and controlling inventories has finally made it into broad retailers, not just Wal-Mart. That's important because it means a lot of the early promotions we've seen have brought the consumers in, but has left less on the shelves with less selection.

Steakhouses all of a sudden don't look so good, but people don't stop eating,

That doesn't mean that competition is getting any less. It just means that companies have to turn inward to innovate in order to boost profits and customer satisfaction,

My own view is that full employment is closer to 4 to 4.5 percent -- probably closer to the 4.5 percent range.

Like what the Fed has suggested, the U.S. economy was more than strong enough to absorb the blows of Katrina. The labor market is still pretty resilient.

I think this is clearly the Fed saying 'we're willing to take out an insurance policy, we're not willing to risk recession',

We are a wealthy nation that rebuilds and fortifies. Ultimately, New York is going to more than recover the losses that this brought on.

To be turning our backs on people who want to work is kind of silly in an environment where you've got tight labor markets and we're getting older and need younger people to work.

Up front there are going to be enormous losses.

The question is not whether the consumer is slowing. From the Fed's perspective, it's whether the consumer is slowing down fast enough to keep inflation in check,

This speech is telling traders that the stability they've come so well to know is their own worst enemy, ... the bond market has not priced in enough risk.

There are many who, on a theoretical basis, would argue that now is the time the Fed should begin pulling back because we'll be feeling the bulk of the rate cuts when we already should have started tightening again.

Why screw around? If they're going to cut, they'll go a half-point. They're just not in a position to be taking risks.

We've got this sort of house of cards. It is either a strong house of cards or the whole thing could implode on us. It could go either way.

We've got the strongest overall profit performance in 30 years, and these are real profits, not the fake ones we saw in the late 1990s.

When the economy goes back down again, years down the road, will consumer credit be a major problem, like it was in the 1990-91 recession? ... Yes, it could come back to haunt us. But right now, it's a macroeconomic plus.

We were expecting sales to remain in record territory today, not set new records, ... This really underscores the silver lining to clouds abroad.

What can the Fed do about WorldCom? This is not an interest rate problem. This is not something they should be involved with, ... I'm sorry, Wall Street, but you can't look to the Fed to save you when they don't have the tools to save you on this one.

We weren't running our heaters very much this winter and this would have the effect of slowing down production,

What the Fed told us today is, we don't think we are done yet and we are not sure when we will be done.

Even more than the early 1990s, this is a jobless recovery. Productivity growth is playing twice the role it played in the early 1990s in driving economic gains, which means less payrolls growth.

There's a difference between good growth and bad growth at this stage of the cycle and this is clearly not the kind of inflationary growth that the Fed gets overly concerned about,

There's no question that the Detroit-based automotive sector has become our region's Achilles' heel.

There's no question that, given the right circumstances, the Fed wouldn't hesitate to spend 175 basis points. But they really have to have a good reason to put an insurance policy out there.

There's no reason to tip your hand because they are in a reactive phase.

There's nothing to be gained by saying anything right now, ... there's a lot of uncertainty... over how long it will have to raise rates.

Is the pressure on inflation behind us? I think not. Inflationary pressures are not going to surge overnight, but they'll creep up.

It was an extraordinary quarter for productivity growth. Katrina was expected to lop off growth and give us a crippled and less efficient quarter. Instead, it showed how remarkably resilient the U.S. economy was both in response to the hurricanes and the energy shocks that accompanied them.

After the fireworks we've seen coming out of Washington on Friday and Monday, I think the Fed would like to be the least bit of news this week.

Once you really start having bidding wars over people and you're willing to employ just about anyone who breathes, it's amazing what happens to the labor force participation rate.

The bottom line is the hiring is not going to be there.

The bottom line is, you're going to be waiting in more lines.

A limited statement would be more productive because the Fed is trying to deal with psychological issues. They want the focus to be on their action, not their words.

This is not much of a surprise. We've got a Fed saying growth is strong, but they're still hedging against a downturn. This is a Fed waiting to see the whites of the eyes of recovery.

You don't want this rally to be cut short before we get back on solid economic ground.

This is a very unusual recession in that the consumer did not collapse and incomes are in the black,

They're now looking at the demand trade-off on oil prices, not just the inflation trade-off, which will make Fed policy much more complicated. It's a subtle but important change.

It's about the Fed being more communicative with the markets, ... won't just be walking into Greenspan's shoes.

It's all vehicle sales and gas. Chain-store sales were relatively strong during the month, suggesting consumers diverted their vehicle spending to other sectors. We also had a cold snap which prompted early spending on winter wear.

It's all part of adding certainty in a chaotic situation.

It's hard to kill this darn consumer, isn't it? Anyone who is losing sleep over the consumer is losing sleep over the wrong thing.

It's my guess the Fed will probably move to the sidelines until at least November,

The minutes confirm the Fed is almost done (raising rates).

The bond market is just overwhelmed by problems abroad,

I view the risk as very high that the Fed shifts its bias to tighten (interest rates) sooner than we had forecast. The risk is rising that they will move sooner.

It will be very interesting to see Fed's decision today, which may include them standing pat in terms of no move on interest rates, and there is chance here they will now talk about risks being balanced between recession and recovery,

The retail sales and industrial production numbers could be better than people expect.

These testimonies are to shape people's expectation of future moves. If you're not sure where you are going then why change it?

Once they got the uncertainty of Katrina out of the way they just got back to their boilerplate statement,

Once they get that debt paid off, it's just free cash flow.

Not only are retailers doing more with less, like every other large corporation, and taking advantage of six fewer days in the shopping season, but they are actually hiring less this holiday shopping season, so there's fewer people on the floors actually helping consumers out.

The Fed will sit on its hands. There's really no reason to do otherwise. The economy's falling into place as the Fed thought -- it's in a soft spot, with some light at the end of the tunnel.

The Fed wants to see whether this July data, this bad economic data, was an aberration, and two months will make it clearer. If they see more instability in financial markets, they will take it lower.

The Fed is willing to overshoot the mark. I want to underscore that we're catching up. We're getting the market back in line, but we're not going to see positive earnings from that until we get into the third quarter,

The Fed doesn't want to be dealing with the old economy, with deficits returning. They're trying to have some impact on decisions made now without getting us into permanent problems.

The consumer is not about to die on us, but let's face it, it's time for them to give a little slack to the business sector.

In the aftermath of Katrina, the effect on the labor market from the fallout has been limited.

By the end of the year, there will be some builders with some overhang of construction relative to demand, ... Now's the time when you'd hope everybody cools off a bit and moderates their building, but that's not human nature -- and it's not the way for homebuilders to make money in the near term.

The effect of the strike will be to short-circuit momentum in the U.S. economy, but we are well positioned to absorb it,

The DVD burner, plasma screen TVs, digital cameras are the hot picks.

The longer this goes on ... the more closely it resembles the inflationary push that we saw in the latter part of the 1960s.