Among leading indicators of business fixed investment, machinery orders are increasing steadily on average, although they are expected to show a decline in the first quarter of 1997 as a reaction to the large increase recorded in the fourth quarter of 1996 in both the manufacturing and non-manufacturing sectors. Construction floor area has also continued to pick up moderately.
If the FOMC were to tie mechanically our actions to market prices, then we would be placed in the sorry position of validating whatever whim that currently struck investors’ fancy. If you were to take our reading of the economy as if from a sacred text, the unique sources of information and skills that you have refined would go untapped.