Greenspan Fiddles With the Volume Control

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Alan Greenspan, party pooper, is back on the job. The morning after the Dow and NASDAQ each threw triple-digit shindigs over Mays sleeping-dog inflation number, the Fed chairman told Congress - and, of course, the intently listening markets - to keep the music down just a little bit. "When we can be preemptive, we should be, because modest preemptive actions can obviate the need of more drastic actions at a later date that could destabilize the economy," he told the Joint Economic Committee. Folks, thats as clear as the man gets without actually saying it: The Fed will raise interest rates one quarter point at its meeting on June 29. Says TIME senior economics reporter Bernard Baumohl: "After two weeks of wondering, he just removed the uncertainty."

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So why were the markets - led by NASDAQ, which as an index of debt-heavy tech start-ups is especially sensitive to interest rates - on the uptick moments after that fateful "preempt" had passed Greenspans lips? Because hes going to do it only once. "A quarter-point hike, which is really nominal, has already been factored in anyway," says Baumohl. "All this talk about preemption means there wont be a series of hikes. Greenspan is still ahead of the curve." The idea of a preventative tweak - and this chairmans impeccable record says its worth a ton of cure - had the inflation-fearing bond markets jumping for joy and yields dropping like a stone. Wall Street isnt going to grouse about the host watering down the monetary punch just a little bit - not if it means this nine-year Mardi Gras can go on indefinitely.