Nov 17 2007
October Inflation: Not so Bad
The CPI increased 0.3% during October, keeping pace with the rate it set in September, according to the Labor Department. The core index, which doesn’t include energy price increases, only grew at 0.2 percent.
So what is the Federal Reserve going to do next month? It seems like the U.S. economy, despite a falling dollar and rocketing oil prices, is bullet proof.
The futures traders are betting on a quarter-point cut in the Target Rate, but I’m not certain it will happen. A lot of it will depend on the strength of the pre-Christmas buying season.
From the NYT story: “There’s been a lot of concern in the marketplace and in the business press about the dollar and high commodity prices feeding into core inflation and causing a problem for the Fed,” said Zach Pandl, an economist at Lehman Brothers. “Those concerns are pretty much overstated, and I think that was confirmed in the report.”
[Thanks to the Indy Star for the image.]
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