Inflation hit a 17-year high this month. The WSJ says that with commodity prices falling, Bernanke won't be spooked into raising rates. I hope to hell he's at least looking over his shoulder a lot and sleeping with all the lights on.
I would have thought that now was a good time for a signal that the Fed will not tolerate carry-over from past commodity price rises into US domestic inflation. The signal can then safely be reversed in three or four months. A little more pain now for a good deal less in future.
Easy money has been the curse of the US economy for the last several years, and now it's finally hitting inflation numbers. The only surprise is that it's taken this long.
Unfortunately I think an interest rate raise is going to have to wait until after November. I have serious doubts that Bush will raise rates (however necessary it may be) and cause additional economic hardship on voters immediately before an election. It's sad too, because however painful this process may be; it's sorely needed.
I see a win win. Bush raises rates (or at least doesn't tell Bernanke not to. Can he do that?) that addresses David's concern about signalling a hit to inflation now. Bush is a lame duck so need not worry about November and McCain can take advantage of it by saying he is opposed to the rate hike and that he would ask the Fed to reconsider and revise down, if he is elected, addressing Tyler's point.
Well, it hit that high last month. And since then energy prices (the big driver of the July increase) have been coming back down. Presumably Bernanke will act based on the most up-to-date information possible.
Thanks for that correction on the month of the 17 year high. Inflation has been so out of control, it is hard to keep track of which month coincides with which new high.
As far as your comment that Presumably Bernanke will act based on the most up-to-date information possible, I am impressed wth your belief that the Fed can engineer the infaltion rate from month to month, given there are generally time lags of many months between Fed actions and impacts in the economy. This is, quite so now, since there has been near zero money growth right for the last three months, which means that any consumer inflation from money printng occurred many months ago.
Let's hope Megan can straighten this all out when she provdes us with the very "predictable" inflation rate.
Are you in favour of not raising rates?
I would have thought that now was a good time for a signal that the Fed will not tolerate carry-over from past commodity price rises into US domestic inflation. The signal can then safely be reversed in three or four months. A little more pain now for a good deal less in future.
Easy money has been the curse of the US economy for the last several years, and now it's finally hitting inflation numbers. The only surprise is that it's taken this long.
Unfortunately I think an interest rate raise is going to have to wait until after November. I have serious doubts that Bush will raise rates (however necessary it may be) and cause additional economic hardship on voters immediately before an election. It's sad too, because however painful this process may be; it's sorely needed.
I see a win win. Bush raises rates (or at least doesn't tell Bernanke not to. Can he do that?) that addresses David's concern about signalling a hit to inflation now. Bush is a lame duck so need not worry about November and McCain can take advantage of it by saying he is opposed to the rate hike and that he would ask the Fed to reconsider and revise down, if he is elected, addressing Tyler's point.
So have you thrown your, "inflation is relatively predictable", belief under the bus?
Or was this 17 year high inflation rate all part of your "relatively predicatble" forecast, which you have not yet shared with us?
Inflation hit a 17-year high this month.
Well, it hit that high last month. And since then energy prices (the big driver of the July increase) have been coming back down. Presumably Bernanke will act based on the most up-to-date information possible.
Well ah Tom T is it?
Thanks for that correction on the month of the 17 year high. Inflation has been so out of control, it is hard to keep track of which month coincides with which new high.
As far as your comment that Presumably Bernanke will act based on the most up-to-date information possible, I am impressed wth your belief that the Fed can engineer the infaltion rate from month to month, given there are generally time lags of many months between Fed actions and impacts in the economy. This is, quite so now, since there has been near zero money growth right for the last three months, which means that any consumer inflation from money printng occurred many months ago.
Let's hope Megan can straighten this all out when she provdes us with the very "predictable" inflation rate.