Hurricane Katrina

This week's letter is from Paul Kasriel of The Northern Trust Company. Kasriel is Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. He advises the Bank's Assets-Liabilities Committee as well as the Corporation's Investment Policy Committee.

Paul looks at the effect Hurricane Katrina will have on the supply side and the effect the Fed is having on the demand side by raising rates. He thinks that the Fed will hold off raising rates at the next meeting, but that this could lead to "sluggish economic growth with rising core inflation." Now, let's take a look at this week's Outside the Box.