His testimony is apt to be consistent with the notion that the Fed is still in a tightening mode and inflation is rearing its head,

The Fed certainly recognizes the importance that the markets are placing on the housing market and could well use it as a means of sending strong signals.

Parry's comments hint that the Fed still views the neutral level of the federal-funds rate to be approximately two percentage points above the inflation rate,

If his reaction to this testimony or this subject is apt to be as emotional as it just was, ... tell him, he should just remain as quiet and passive as possible.

'Watch for [Fed members'] comments this week; they'll say, 'It's just one month,' ... They tend to look at the cumulative evidence on certain issues before passing any meaningful judgment with policy significance. They need much more than this.

The question is -- and this is why the market hasn't reacted too negatively to the durable goods report -- is whether businesses ... will continue to spend given the risks to consumer spending posed by high energy prices.