Posts filed under “Fixed Income/Interest Rates”
The Sept. 20 statement announced that the Fed was raising its key short-term interest rate by one-quarter point to 3.75%, its 11th straight increase, despite uncertainty about the economic impact of Hurricane Katrina. The storm hurt near-term economic growth, which normally would call for lower interest rates. But it also has elevated inflationary pressure, which normally would call for higher rates.
PARSING THE FED
Weathering the Storm
WSJ, September 20, 2005
So let me make sure I completely understand this: If we back out all of the inflationary data from the CPI, and PPI, there is, um, no inflation?
Thanks for clarifying that.
While the Dismal Set — and the majority of CNBC guests — continue to spout such foolish nonsense, its nice to see that at least the WSJ wasn’t bamboozeled. Their online headline read: Consumer Prices Climb 0.5%
"Gasoline prices shot up 8.3%, the biggest increase since February 2003.
Food prices, however, were unchanged for the first time in nine months.
Medical-care prices were unchanged after nearly 30 years of increases.
Housing prices grew more slowly in August, falling to a 0.2% rate from
0.4% in July. Automobile prices fell 0.5%, half the rate of decline
recorded in July."
You can see more from the dismal set below . . .
UPDATE I: September 16, 2005 10:54 am
Its the ultimate Hedonic adjustment: Chart of the Day shows us graphically that without the items that are going up in price, there is hardly any inflation at all!
UPDATE II: September 17, 2005 11:54 am
The first official chart from the weekend WSJ:
UPDATE III: September 24, 2005 2:54 pm
Here’s a round up of all our recent discussions on inflation
Consumer Prices Climb 0.5%
Katrina Helps Propel Jobless Claims
To Highest Level in Nearly 10 Years
WALL STREET JOURNAL, September 15, 2005 5:44 p.m.