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"The Fed’s duties are clear—to maximise growth and employment as far as possible, but to do so while maintaining price stability. Notwithstanding some disappointing data in recent days, an increasing number of economists are now starting to think that inflation could become the Fed’s biggest concern this year. The Bush administration, in this case personified by Paul O’Neill, the treasury secretary, continues to insist that it believes a strong dollar is good for the economy and that it is unconcerned about the current-account deficit. It is in any case not clear what effective action the government could take if it thought otherwise."
"But should market concerns intensify, and lead to a dramatic collapse in the dollar, Mr Greenspan might become very anxious about inflation—since the conventional wisdom has it that a sharp fall in a currency can lead to a rapid acceleration in inflation. The Fed might then find itself steering a tricky course between heading off inflationary pressures and sustaining what might become a very weak recovery. That is not the position now. But Mr Greenspan, who is famous for obsessively scrutinising the constant stream of economic data even at the best of times, will be acutely aware of the risks and uncertainties ahead."
8:18:50 AM Google It! 
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