Jobs! Higher wages! Stocks are kicking ass! The bond market stoked on the return of the 30 year bon! There is an almost Clintonian feeling in the air in most sectors of the economy right now–and it’s quite possible that it’s irrational exuberance II, but I doubt it. Earnings have been strong for a while now (once Bush’s taxcuts have worn off, it seems), so the fundamentals are up.
And even though there is evidence that unemployment is not as low as advertised and low, even negative inflation has been measured in the last three months, don’t expect the Fed to allow this to continue for much longer. They seem quite miffed that their short term rate hikes have failed to hurt the mortgage rates or longer term rates.
So, some might wait and see if their next hike echoes further up the interest rate chain, but chances are that the only real bull market of the 00s will be dead by the end of the year. God forbid wages should go up.