CPI Registers Spring Spike

Fed may have hands tied, as CPI soars past expectations

(NEWSER) - Core inflation bounded ahead of expectations in January, which is bad news for anyone betting on a big rate cut from the Fed–and for the Fed itself. The consumer price index rose 0.4%, with core CPI rising 0.3%, putting the year-over-year figures at 4.3% and 2.5% respectively, well above the Fed’s traditional 1.5%-2% comfort zone, the Wall Street Journal reports. More»

Central bank's top priority remains curbing inflation

(NEWSER) - The Fed today kept its benchmark interest rate steady at 5.25%, despite concerns that tightening credit will lead to an economic downturn. It's the ninth consecutive time the Fed has left the prime rate unchanged, the Times reports, and a sign that Ben Bernanke's top priority is curbing inflation rather than accommodating apprehensive investors. More»

Despite record growth, Wall Street has plenty of cause for concern, Business Week says

(NEWSER) - Wall Street is giddy with low unemployment, optimistic earnings predictions, and a resilient economy, but BusinessWeek lists five things for investors to worry about.

1. Volatility in earnings, especially tech companies
2. Consumer spending, as gas prices take their toll
3. Inflation, which could prompt the fed to raise interest rates
4. Subprime aftereffects, as the panic spreads to other forms of debt
5. Too much optimism, as it starts to look like irrational exhuberance

But gas prices, at record highs, still worrisome

(NEWSER) - The core consumer price index stayed steady last month, rising just 0.2% and cooling worries about inflation. The overall CPI, which responds to fluctuating food and energy costs, climbed 0.4%, still well within the comfort zone. That's good news for the Fed, which held interest rates steady last week in hopes of targeting inflation. More»

Consumer prices up 1.1%; wholesale up 1.8%.

(NEWSER) - Consumer prices rose a staggering 1.1% in June, Bloomberg reports. The figure far surpassed analyst estimates, and brings the year-over-year figure to 5%–the biggest surge since 1991. Core inflation, which excludes food and energy, rose a more-than-expected 0.3%. “Inflation has galloped,” one economist said. “It puts the Fed in a really tricky position. I don't see how they can change rates this year.” More»