Today was a relief rally; it was an oil-price relief story. Oil prices are still very high, but much more moderate than the worst fears of last week.

The Federal Reserve cannot address directly supply disruptions and really the best support they can give in this situation is to keep the economy on a sound footing with low inflation.

The economy remains very solid and it appears likely to expand at a pace of 4-1/2 percent to 5 percent in the second half of the year.

We could very much be close to the peak at this time.

We are seeing on one side fewer layoffs, and on the other side we are seeing a pickup in hiring.

Right now we're already starting to see that rebuilding is under way and energy prices are moving lower so that makes it easier for them to stick to their strategy. They will likely conclude that the economy is showing a great deal of resilience and that it is able to withstand a higher level of oil prices.

Today was a relief rally; it was an oil price relief story.

The economy was pretty much firing on all cylinders, and the second quarter showed us still on a good growth track ... but oil prices pose a risk to growth and inflation.