Economic indicators were surprisingly consistent this week. The Federal Reserve's Beige Book suggested that economic activity remained lackluster through June 4. Retail sales were anemic; manufacturing is in recession. The inflation news was generally friendly with the exception of higher energy prices in the CPI.

A consensus is starting to develop among market players that the Fed is likely to reduce the federal funds rate target by 50 basis points at the end of the month. The figures are weakening from last month. More than one voting Fed official has noted that the economy was in a growth recession. Even Alan Greenspan suggested that the Fed intentionally front-loaded the easing that it has already done in order to move the economy along more quickly.