But the debate explains why Wall Street can react so badly to good news. If the canary dies, we will have a serious and deep recession. Sohn acknowledges that all doesn't look bad now on Main Street. But he worries about what could happen to consumer spending in the months ahead. It is a tough call.
Consumers say they are less confident, but they keep spending on cars and homes.
And that zest for spending on Main Street has other economists saying the Fed is on the right path. The Main Street camp sees what the Fed sees. Consumers already have more reason to be optimistic. Lower rates mean that many have been able to refinance their mortgages and pick up extra, cheap cash. For nine weeks in a row, refinancing has accounted for half of the mortgage business, according to the Mortgage Bankers Association in Washington.