Get ready for even more talk of a "second half rebound"

Does anyone else remember back in 2001 and 2002 when, after the first of the year, you'd hear incessant talk of a "second half rebound" that never materialized. It finally took a war to get the stock market and the economy kick-started in the spring of 2003.

Now that it is clear that both the economy and equity markets are in a good deal of trouble, these "second half rebound" predictions seem to be popping up all over the place.

Maybe it has something to do with the Super Bowl.

Earlier today, Dallas Federal Reserve President Richard Fisher added his name to the list of second half optimists, speaking in Mexico City in Spanish. This report from Bloomberg provides the details:

U.S. economic growth is poised to return to its long-term trend in the second half of the year following aggressive interest-rate cuts, said Federal Reserve Bank of Dallas President Richard Fisher.

``We're going to go back to normal growth rates,'' Fisher, who dissented from the Fed's decision last week to cut interest rates, said in a Bloomberg Television interview in Mexico City. ``We're going to have slower growth for awhile, for a half year.''

Fisher's remarks reflect his vote at the Jan. 30 Federal Open Market Committee meeting to oppose the half-point cut in the benchmark rate to 3 percent, after an emergency reduction the previous week. Fisher said monetary policy affects economic growth with a lag, so policy makers must consider the impact of rate cuts already taken as well as the potential for inflation.

Monetary policy ``is like a really good tequila: It takes time to make a punch,'' Fisher said in the interview, which was conducted in Spanish. ``Monetary policy takes a long time to have an effect.''

Futures traders are betting that the Fed will need to lower its main interest rate further, by 1 percentage point. The central bank cut the rate by 1.25 point to 3 percent over nine days last month, the fastest reduction since the federal funds rate became the main policy tool around 1990.

While the choice of alcohol was fine, given the location, it's not clear that "liquor analogies" in general are really appropriate these days when it comes to U.S. monetary policy - history appears to be on its way to judging the Federal Reserve as being too good a bartender over the last ten or fifteen years.