PPI higher than expected
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.o2Ke_vb2z4&refer=home
PPI rose 1.1% in 1 month. Excluding energy and food, that rate was 0.2%
Yesterday we learned that consumers are buying fewer things as food an gas eat into budgets.
Today we find that companies are facing the same pressures from inflation.
The Fed can try and play a game that excludes food an dfuel but in the end there will still be an economic slowdown. Cutting rates further - as expected this month - will increase inflation.
The Fed seems to be willing to suffer short-term inflation in order to jump-start the economy. Unfortunately, they will get the inflation but not the economic jump start.
PPI rose 1.1% in 1 month. Excluding energy and food, that rate was 0.2%
Yesterday we learned that consumers are buying fewer things as food an gas eat into budgets.
Today we find that companies are facing the same pressures from inflation.
The Fed can try and play a game that excludes food an dfuel but in the end there will still be an economic slowdown. Cutting rates further - as expected this month - will increase inflation.
The Fed seems to be willing to suffer short-term inflation in order to jump-start the economy. Unfortunately, they will get the inflation but not the economic jump start.
posted by Andrew at
6:52 AM
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