Prices are falling. The Fed will interpret this as “deflation” whereas it is more related to lack of demand. They will interpret falling prices as “deflation” and view this as dangerous to the economy. Here is a summary of the PPI and Ex-Im prices indices. Tomorrow (Thursday) the CPI will come [...]
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Inflationistas are probably confounded by Friday’s Consumer Price Index report that showed a decline of 0.2% in June. The report pins the decline, the first since June 2010, on falling energy costs. As a large component of CPI it: declined 4.4 percent in June, the largest decline since December 2008. The gasoline index, which fell [...] |
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