The talking heads keep worrying about inflation, but it is a non-issue at this point. Inflation always keeps a slight uptick at first even as the economy slows, then it eases. The Feds would be well-advised to pause and wait for more data. Rental prices keep going up as mortgages get too expensive and raising rates will only exacerbate that problem. Since rental prices are 40% of the reading, you can see the pickle they have put themselves in. Just by resurrecting housing, they will lower rental prices and ease inflation. Last time I checked, there wasn't much pricing power anywhere else. Just go to the DELL website and see for yourself. Gasoline prices? That is a tax, hardly something that can be passed on to wages. However, the Feds often waver on this as you can see in this 1997 analysis:
This entry was posted
on Wednesday, July 26, 2006 at 3:53 PM.
