Yesterday you may have seen the most the all time record report of the Purchasing Manager's Index for US Manufacturing.

So at first blush it seemed that here was a piece of good news. The weakest sector of our economy, manufacturing, looks like its starting to get back on it's feet.

Unfortunately, as we dug through the report, it became apparent that industrial production in general, and manufacturing in particular remain moribund.

Last week it appeared that the stars had aligned. That, for the first time since the Pandemic's Economic Lock-Down, that the Fed would return to a more normal interest rate policy.

Inflation, seemingly the Fed's most important indicator for raising rates, inflation was now above their 2% benchmark.

Employment, the other principal mandate, was rising. We had seen job vacancies skyrocket, to nearly 10 million available positions. While the unemployment rate had slipped to just 5.8%, nearly half of the rate of last year at this time.

It's simply the cornerstone. And upon it is all else is built in this free market system.

It is price.

You no doubt remember your college economics's professor drawing those two lines upon the board. The supply curve and the demand curve, and their intersection was the free market price.

And once discovered, price told you everything. Rising prices said that demand was good, and that producer's and suppliers were receiving increasing profits. While declining prices may indicate some trouble ahead.

Last week we had the conclusion of the two day meeting of the Fed's Open Market Committee Meeting. The committee which sets short term interest rates, as well as establishing monetary policy.

It was a meeting which shook Wall Street, as the Fed suggested that they are willing to raise interest rates, in other words, tighten monetary conditions, in response to the spate of higher prices currently surging through the economy.

During the first quarter of the year, as global economies re-opened, we saw economic numbers reported that we haven't seen since the end of World War 2.

As economist reported: it was a return to base levels, and showed just how oppressive the shut down was.

A week that was marked primarily by an up-tick in inflation around the world. In total 9 countries and the Euro Zone, announcement their latest measure of inflation.

Eight of those countries: India, Germany, Saudi Arabia, France, Italy Great Britain, Canada and the US, continued to report higher prices. Only Japan, which once again reported a decline in their prices for the month.

Only Japan went counter to this worldwide trend toward increasing inflation.

It's easy to equate how the economy is performing, with how the stock market is doing.

Currently, with all the major averages either at or near all time records, we assume that means the economy in general is performing well. And of course, with the tremendous stimulus that has been put in peoples hands, people have cash.

And so things appear to be going along just fine.

Yesterday concluded the two day meeting of the Federal Reserve's Open Market Committee. This Committee is the one that put in place the Fed's on-going monetary policy.

And as is traditional, the Fed Chairman, Jerome Powell concluded the meeting with a statement and a question and answer period. I supposed this is designed to let us feel that we have some insight into the current thinking of our central bank.

So, when was the last time you walked into the grocery store, and informed the grocer you would give him $1.50, for instance for his bunch of carrots. Or told your department store that you'd pay so much for his shirt.

It just doesn't happen. Customers don't set the price.

Year after year, the swallows return to Capistrano, Hurricanes happen in their seasons, and Stock Market Crashes occur in the Fall.

Fortunately for us, crashes don't happen every year. Only about once a generation.