Hey all! First off, I would like to say thanks to all the positive feedback from my training videos I posted a while back! I have been very busy lately and haven't been back to Leerburg since then!

And nextly, we are having a slight...problem? I don't know if it really is one or not.

Dewey and I live with a cat, Jack.

Well, Jack likes to tease Dewey. He comes up and meows and rolls around in front of him, and this gets Dewey pretty wound up. He usually pounces around him, fake nips at him and mushes around the floor on his side, trying to get Jack to play.
The problem comes when Dewey gets too close to Jack; if he does, Jack will start to hiss and if I don't call Dewey off, he usually takes a swing at him.
Yesterday this happen, but Jack actually scratched him across the nose, and Dewey gave a growl-bark and lunged at him a little bit. I corrected him verbally (I was across the room) and he walked away.
I'm wondering if I should stop letting Dewey even get frisky with the cat, or if this is something I should just shrug off and let them learn on their own.
Dewey isn't aggressive with Jack, nor does he chase him. And Jack is SUCH a tease!

There is the chance it could escalate. There is the chance your dog could lose an eye in the process...

Or Dewey could defend himself with disastrous consequences to the cat.

I'd separate them unless you can closely supervise and break up any trouble in an instant. Even that might not be enough, as fast as animal reactions can be.