What's up at the Fed?

Economic supply (GDP) grew by 6.9% in fourth quarter of 1999 and has not slowed meaningfully so far, this year. The Fed expresses no problem with that per se. Demand (domestic output augmented by net imports) grew 7.2% in the fourth quarter of 1999 and has not slowed meaningfully so far this year. The Fed expresses no problem with that per se. So, why is the Fed tightening policy? Greenspan at the recent Humphrey Hawkins testimony said: "What it is that we are concerned about is not the rate of increase in demand or the rate of increase in supply, but only the difference between the two." ...