Europe has double-digit unemployment and no inflation problem, ... Any European Central Bank tightening will be swamped by much more from the Fed.

This level of inflation, combined with falling unemployment and rising capacity utilization, is a recipe for continued preventative rate hikes.

Thailand has been more resilient to shocks since 1998, given the manageable inflation, low unemployment, more flexible exchange rate and increased international reserves.

Despite low unemployment, wage growth remains contained. With job gains slowing, the risks from wage inflation appear to be receding. Interest rates will remain on hold in 2006.

Moreover, the four motors of consumption -- that is wages, inflation, unemployment and consumer confidence -- are on a downward trend and should drag spending down.

I think [Fed Chairman Alan] Greenspan owes it to his successor and financial markets to stand firm on inflation amidst rising inflation expectations by hiking and largely sticking with the previous statement rather than catering to politicians and any pro-growth inclinations by either pausing or hiking and issuing a dovish statement,