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Mark to Market

Friday's dreadful jobs report for October lured several of the cognoscenti out of the 25-basis-point cut camp and into the camp of the half-pointers.

Not everyone mind you. Some economists, even after reading the jobs horror story, are sticking to their guns that the FOMC Tuesday will cut the funds target rate by only 25 BPs, to 2.25%.

Among the quarter pointers is Steven Ricchiuto, chief economist at ABN AMRO. "The real fed funds rate," he said Friday afternoon, "is already in negative territory, and considering the concerns about over-stimulating the economy expressed by the inflation hawks on the FOMC, we think the size of the November move will be just 25 basis points."

The folks in the economics shop at Salomon Smith Barney beg to differ. "It's a close call but we believe policymakers will opt for the larger move," they wrote Friday afternoon.

Well, I'll wait for the Tuesday morning column to make my call. Even so, Steve, I must say that the country appears to me to be under far more pressure from deflationary trends than from bubbling inflation.

The FOMC rate hawks don't appear to have the fodder with which to feed their fears. Friday, ECRI, the Economic Cycle Research Institute, said its "U.S. Future Inflation Gauge, designed to anticipate cyclical swings in the rate of inflation, plummeted to a 26-year low of 96.0 in October ... "

"Today, inflation pressures are at their lowest levels in a generation because of the first synchronous global recession since 1973-75," ECRI added.