Apart from the rate increases already in place, rising gas prices, while they get batted back and forth by Gore, Bush, Congress and Bill Richardson in a game of presidential-election Ping-Pong, are doing the Fed's work this summer by reducing disposable income for consumers. May's job numbers showed unemployment leveling off and perhaps going back on the rise. Consumer confidence is slipping. For the gradualist Greenspan, who can still combat an economic bounce back with one more pre-election move in August, this is the perfect time to stand pat — and act worried. Look for some hawkish comments Wednesday to keep the markets, which are inclined to rally on the news that the Fed's year just might be over, from getting too sure of themselves and lighting a portfolio-fueled fire that would undo all Greenspan's good work.
TIME senior economics reporter Bernard Baumohl on why Big Al will stand pat:
"There are too many consistent signs that the economy is indeed slowing. And most people feel that the last two hikes — 75 basis points altogether — have still yet to make themselves felt in the economic numbers. Politically, Greenspan is hard-pressed to justify another tightening in the current environment. But because of the opposing viewpoints among Fed governors like Meyer, investors will probably be sitting on their hands until Wednesday. If Greenspan doesn't surprise us with a hike, tech stocks especially could be sparked by the news."