If inflation picks up, that will be a negative surprise, but, even then, we think the inflation problem would still be moderate, requiring a moderate Fed response and generating moderate equity losses at that time.

FORBES: Malpass Still Bullish on U.S. Economy

But the true test of the row's impact, in his view, is the response of moderate, independent voters.

ECONOMIST: Public-sector unions: Time for second thoughts? | The

Turning to international news, state television and major newspapers say the Chinese foreign ministry supports a "prudent" and "moderate" UN Security Council response to North Korea amid its threats to nullify a 1953 cease-fire that ended the Korean War.

BBC: China media: Wen's mixed legacy