The Fed is sticking to its guns,

[Economist Robert Walters of Quicken Loans in Livonia, Mich., agreed.] The Fed is sticking to its guns, ... They took pains to address the tragedy of Hurricane Katrina, but they also made it clear that they see it as a short-term event from the economic perspective.

The Fed used to have ammunition.

The Fed has been on 'autopilot' with its monetary tightening so that even bouts of weaker data, such as we saw after hurricane Katrina, failed to divert the Fed off course. But now, following the minutes of the December meeting, it is clear that policy will become more data dependent.

There is some speculation the Fed is closer to halting its tightening cycle.

I think they are. I think that the Fed either finished its tightening for this cycle, or it has 25 basis points to go in a couple of weeks. I do not see the Fed tightening further in August.