According to Beata Caranci, Senior Economist (U.S. & International Analysis), TD Economics, “US core inflation
is holding within the 2-2.3% range for the past 14 months – about one-quarter of mid to late 70s.” Yet, the hilarious fact is that core inflation doesn’t even factor in energy price rise, one of the primary factors behind the recent inflationary pressures. It is unbelievable that the Feds – due to the illusion created by asset price rises – have wrongly assumed the current inflationary trend to be a “demand pull” one (ergo threatening to increase rates further), when in fact, the inflation this time around is actually a “cost push” one, with energy and transportation costs contributing a massive 56% to inflation (quarter ending May, compounded annual rate).
For complete IIPM article click here
Source:- IIPM Editorial, 2006
Editor:- Prof. Arindam Chaudhuri.
is holding within the 2-2.3% range for the past 14 months – about one-quarter of mid to late 70s.” Yet, the hilarious fact is that core inflation doesn’t even factor in energy price rise, one of the primary factors behind the recent inflationary pressures. It is unbelievable that the Feds – due to the illusion created by asset price rises – have wrongly assumed the current inflationary trend to be a “demand pull” one (ergo threatening to increase rates further), when in fact, the inflation this time around is actually a “cost push” one, with energy and transportation costs contributing a massive 56% to inflation (quarter ending May, compounded annual rate).For complete IIPM article click here
Source:- IIPM Editorial, 2006
Editor:- Prof. Arindam Chaudhuri.
