Short-term rates: Room to run?
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"As for backlogs, if you order a book, a refrigerator, a car or a mainframe for your business and suppliers are out of inventory, they have to ramp up production. If that spikes then there's a supply-and-demand gap and prices need to rise to accommodate that. It's not an alarming situation now, but it could create inflationary pressure ahead."

"It doesn't make sense to extend maturities because you're taking time risk. Some people have specific things they need money for, at a specific time.

"That's when it makes sense to get a three-year, four-year, maybe five-year CD. But try to get the highest return without incrementally taking on more risk."

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The economy
"I don't know if there will be a recession. Speaking with a lot of my clients who range from dentists to jewelry store owners, there's not a lot of slowdown and, apparently, there's a lot of capital waiting to be spent. But the bond market in my view is rarely wrong. Too many people are dispelling it. What's the catalyst that will make the economy slow down? People point to housing. There's a major slowdown in condo sales and housing is starting to slow. That's been an underpinning of the economy."

The Fed
"I think we see maybe one more hike beyond March. For (Fed Chairman Benjamin) Bernanke, full employment is not necessarily No. 1; price stability is. If inflation moves forward I think he'll be less tolerant and raise rates quicker."

Interest rates
"If we hit 6 percent on one-year CDs, it may be more of a competitive issue rather than because of the Fed cranking up interest rates. I see in my own backyard that banks are very aggressive on savings rates, especially in midsize institutions.

"From a duration standpoint I've been keeping clients three years and in. A steep yield curve never materialized, and with the potential for one or two more Fed moves I've been pushing clients out a little farther.

"Compare tax-free to taxable. You have tax-free rates now on short-term paper at about 3 percent, and money markets are around 3.25 percent or 3.5 percent. Know your marginal tax rate and factor it in. If you're in the 25-percent bracket, a 5-percent CD gives you 3.75 percent after tax. If an equivalent-term tax-free is paying 3.75 percent then they're the same. But you have to be careful giving someone advice if they're going from CDs to other instruments because you don't have the same guarantees."

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The economy
"Monetary policy acts with a lag to slow the economy, so the rate increases haven't worked their way through to slow growth. The consumer confidence numbers are low because consumers live in the real economy. They know that doctors aren't cutting prices for appendectomies and that they're paying more for gas and that college is very expensive."

The Fed
"The only real worry for the Fed is housing. How much will it slow things down? We'll probably get the fed funds rate to 4.75 percent in March, and there's a pretty good chance we'll see 5 percent in May. The Fed will take this one economic indicator at a time and will look at high-frequency indicators such as unemployment claims and mortgage applications. The point is the Fed is done with automatic, 25-basis-point increases every meeting."