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Dollar in the Dumps
It’s now official: the recession is over. We know this because Fed chairman Ben Bernanke said so this week, though the full quote is not exactly brimming with optimism. “Even though from a technical perspective the recession is very likely over at this point, it is still going to feel like a very weak economy for some time as many people still find their job security and their employment status is not what they wish it was,” Bernanke said. We must say this off-the-cuff remark is impressive for containing at least six disclaimers: 1) “From a technical perspective…” 2) “very…
17Sep2009 | Invest With An Edge | 0 comments | ContinuedInflation and Consumer Price Index Rise Slightly
The consumer price index (CPI) moved 0.4% in February, a little higher than expected and a sign that consumers are dipping their feet back into the water – slowly.
More importantly, while the data isn’t a gigantic leap forward, it’s at least not another deathblow to the economy.
Joel Naroff, president of Naroff Economic Advisers, wrote in a note to clients that it doesn’t look like consumer demand will collapse, which will help the forces moving the economy find the bottom of the crisis.
“Neither deflation nor inflation seems to be an issue for the economy right now,” he said, adding…
19Mar2009 | Money Morning | 0 comments | ContinuedExclusive Government Update
“The Sky Is Blue, Water Is Wet … and the U.S. Economy Is Officially In Recession”
Things are so bad now that even the government has had to admit the painfully obvious: the U.S. economy has ground to a halt and is now trying out the reverse gear. According to the official numbers, it’s going backwards at the rate of 0.5% as per the third quarter.
Bloomberg, eminently more sensible than the government, claims the recession actually began in 2007 which makes it the longest recession in nearly 20 years – already!
Aside from the negative GDP growth, the most worrisome number in…
4Dec2008 | Oxbury Research | 0 comments | ContinuedWhy Fed Policies and Treasury Department Bailouts Will Lead to Inflation Rather Than Deflation
The U.S. Producer Price Index (PPI) and Consumer Price Index (CPI) both fell in October. Those declines – combined with sharp downward spirals in worldwide stock and commodity prices – have caused many analysts, and even central bankers, to worry that we are on the brink of deflation.
Such concerns may be warranted in the short-term. But in the long run, deflation won’t be the challenge we face.
Thanks to an overly aggressive central bank, and more than $1.5 trillion in U.S. Treasury Department bailout programs – as well as other factors related to the ongoing global financial crisis – inflation…
3Dec2008 | Money Morning | 0 comments | ContinuedFederal Reserve Policymakers Stand Up to Wall Street’s Easy-Money Crowd
The U.S. central bank’s Federal Open Market Committee (FOMC) yesterday (Tuesday) left the benchmark Federal Funds rate target at 2.0%, after many had expected the central bank policymaking committee to cut rates in the wake of the Lehman Brothers Holdings Inc. (LEH) collapse.
What’s more, the statement that was issued after the policymaking meeting was somewhat “hawkish,†suggesting that the U.S. Federal Reserve is awakening to the dangers of persistent and gently rising inflation. Wall Street was initially spooked; it had hoped for the usual bounce that follows a Fed rate cut. However, investors subsequently decided the Fed’s inaction meant things…
17Sep2008 | Money Morning | Comments Off | ContinuedEscalating Inflation at Home and Abroad Puts Pressure on Central Bankers
Inflation is spreading like wildfire around the globe, and while not every country is hurting as bad as Zimbabwe with its mind-boggling 2.2 million percent inflation, the United States and Europe are definitely still getting scorched by rising prices.
U.S. consumer prices, as measured by the Consumer Price Index (CPI), increased 1.1% in June, the Department of Labor reported yesterday (Wednesday). That brings the inflation rate for the past 12 months to 5%, well above the U.S. Federal Reserve’s preferred target of 2.0%.
The increase was higher than expected as a 6.6% jump in energy costs and a 0.8% rise in food…
17Jul2008 | Money Morning | Comments Off | ContinuedInvestors Will Watch as Inflation Dominates the Spotlight This Week
Investors better keep an eye on bonds this week.
While the stock market may be more fun to follow, fixed income is often a stronger gauge of investor expectations of the economy, future U.S. Federal Reserve policy, and inflation.
With the consumer price index (CPI) safely in the books for another month, economists can now turn their focus to wholesale inflation with the release of the May producer price index (PPI). Economists, mistakenly, often disregard the energy component of this data each month and focus mainly on the so-called “core†releases – which excludes “volatile food and energy prices.â€
While food and energy…
17Jun2008 | Money Morning | Comments Off | ContinuedWith Oil Speculators Blitzing, the Fed Needs to Call an Interest-Rate Reverse Play
The inflationary reality that we as consumers have been living for months may finally be starting to dawn on the U.S. Federal Reserve.
The minutes of the last policymaking Federal Open Market Committee (FOMC) meeting, released on Wednesday, showed that the Fed’s inflation forecast was raised from a range of 2.1%-2.4% to a range of 3.1%-3.4%.
Add the zooming oil prices we have seen recently into the mix, and the conclusion is inevitable: The nation’s central bank will soon have to reverse course and start raising interest rates – and probably in a hurry, too, if the Fed wants to keep oil prices…
28May2008 | Money Morning | Comments Off | Continued
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