I'm convinced that the Federal Reserve will cut interest rates for the last time at their next meeting on April 29-30. I expect that the Fed will bit the bullet one more time--after a heated debate--and cut rates by 0.5%. This is simply because market rates are still at the shockingly low levels, and the Fed never fights market rates.

The Fed's corundum is that the more they cut rates, the more they weaken the dollar and accelerate commodity inflation. Of the world's commodities, 88% are traded in dollars. The net result is stagflation, just like we had back in the 1970s. In fact, the two dissenting Fed members at the last meeting, Charles Plosser and Richard Fisher, warned that the public was beginning to think that rising prices were permanent.

The Fed Funds rate is currently at 2.25%/ I think it with would be a BIG mistake if the Fed lowered the rate below 1.75%. After 9/11, Greenspan went all the way down to 1% and held it there too long, and that helped bring about the housing bubble.