CPI Hits 5.6%, Will Fed Keep Rates Steady?

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CPI Hits 5.6%, Will Fed Keep Rates Steady?

By Markham Lee on August 15, 2008 | More Posts By Markham Lee | Author's Website

Here is a graphical look at the YoY increase in inflation within various major cities around the U.S.

Graphic courtesy of the NY Times

If the Fed’s “inflation ex-inflation” number is 5.6% can you imagine the level of inflation most households are dealing with, especially when retail spending has lagged CPI for several months running?

While this data seems to indicate that the Fed will keep rates steady (or maybe even raise them if it gets worse), I’m still taking a “wait and see” attitude as this Fed doesn’t exactly have Volckeresque courage when it comes to resisting an easy fix, rate cuts, interventionist policies, etc.

You can read more about today’s CPI data here.

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