The big news of the week was market's negative reaction to another quarter point cut in short-term interest rates. But the price data later in the week showed that the slower pace of economic activity is not resulting in less inflation pressure. Indeed, the price data showed more life in November than a month earlier. That should not have been a surprise. And it keeps the Federal Reserve from cutting further. But the Fed was quick, along with central banks elsewhere, to pump more money into financial markets in an effort to keep liquidity in credit markets from freezing up.
