Drew Matus from Lehman Brothers on the Fed, the economy and Friday's NFP

Drew Matus, Senior economist of Lehman Brothers Holdings, says rates could be at 1.25% for a Year. He thinks the Fed might be inclined to pause for now but will have to restart the rate cutting cycle at the end of the year. Bernanke like Greenspan is concerned with asset price deflation, in his firm's opinion, but is in a better position because of a rather high headline inflation rate. Bill Gross in his Investment Outlook argues in a somewhat similar way that home price deflation must be countered "or else the battle might be lost".

Matus sees the April employment number at -90k with the UER holding steady at 5.1.

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video: Drew Matus, Senior economist of Lehman Brothers Holdings, Says Rates Could Be at 1.25% for a Year
Bloomberg
http://www.bloomberg.com/avp/avp.asxx?clip=mms://media2.bloomberg.com/cache/vyTFeWtzW5lQ.asf

read also: Bill Gross' investment outlook for May 2008
http://manonthestreet64.blogspot.com/2008/04/bill-gross-investment-outlook-for-may.html