If President Clinton's deficit reduction bill is killed, bond prices will drop, the stock market will soar, and the rich will drink champagne in their hot tubs in the Hamptons over the weekend and return to work Monday ready to hire more employees.
That's Ed Yardeni's view, and the chief economist at C.J. Lawrence Inc. is always worth listening to. He's almost certainly right about the bond market dropping if Congress fails to reduce the deficit by $500 billion over the next five years. If it does fall, there will be that much more short-term stimulus in the economy, and demand for funds and inflationary pressure will gain some strength.