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In the alternative universe of "Greanspanian Economics" inflation isn't always and everywhere a monetary phenomenon, no, it's a product of what Greenspan calls "pricing power". Well, whatever. The important thing is that Greenspan & Co. finally recognized that something has to be done to put the kabosh on ever accelerating Fed-generated inflation. Quotable:

"Lastly, let me emphasize that recent financial indicators, including rapid growth of the money supply, underscore that the FOMC has provided ample liquidity to the financial system that will become increasingly unnecessary over time. The Committee is of the view, as you know, that monetary policy accommodation can be removed at a pace that is likely to be measured. That conclusion is based on our current best judgment of how economic and financial forces will evolve in the months and quarters ahead. Should that judgment prove misplaced, however, the FOMC is prepared to do what is required to fulfill our obligations to achieve the maintenance of price stability so as to ensure maximum sustainable economic growth."

Here is how the Finanicial Times covered the story. Posted by Greg Ransom | TrackBack