The economic picture has been nearly unchanged throughout this year. Housing activity has been the main impetus behind economic growth. Industrial production has posted gains but these, with a few exceptions, have been anemic through much of the year. Inflation trends remain sanguine.

The market environment has changed a bit these past few weeks. A slightly higher portion of earnings announcements have been more positive than negative and this has boosted morale in the equity market. At the same time, bond prices have fallen and yields have risen sharply as an improving stock market generally bodes ill for bonds.

The FOMC will meet in a couple of weeks, but no one is talking about an imminent rate drop. Fed officials on the dais this week focused their remarks on the accommodative nature of current monetary policy. These officials don't appear ready to vote for a rate reduction on current economic news.