This Moron Fed Governor Thinks Inflation Is Tame...God Help Us All!
Excerpt from speech:
Dennis P. Lockhart
President and Chief Executive Officer
Federal Reserve Bank of Atlanta
Calhoun County Chamber of Commerce
Anniston, Ala.
February 8, 2011
'So what about inflation? I'll start with what the data tell us. The retail price measures jumped at year end as the price of gasoline rose. But looking beyond the rise in gasoline prices, consumer price increases remained exceptionally modest. In fact, about 25 percent of the consumer's market basket as measured by the consumer price index (CPI) showed declines in December.
A similar pattern is evident at the producer level, where industrial commodities prices were elevated during the fourth quarter. But excluding energy, upward price pressures at the producer level were less evident in the data.
In the most recent FOMC statement, following the January meeting, the committee acknowledged the rise of commodity prices, but stated that "measures of underlying inflation have been trending downward."
Yet inflation anxiety is rising. There seems to be a disconnect between what the Fed is saying and what people are experiencing when they fill up their gas tanks or read about rising food prices around the world. Over the last couple of weeks I've taken note of newspaper headlines. Here's a sampling: In USA Today, "Prices starting to creep higher"; in the Wall Street Journal, "Cost inflation puts a wrench into the works" and "Inflation fears replace other market worries"; in Fortune magazine, "How inflation is turning breakfast into a luxury item"; and just last Friday in the Journal, "Bernanke denies that Fed is stoking inflation." Are the Fed and the public on different planets?
Certainly not. But I do think in the swirl of official statements and public discourse we may be talking about different things. To my way of thinking, the term "inflation" is misused in describing rising prices in narrow expenditure categories (for example, food inflation). Nonetheless, recent price news has encroached on the public consciousness with the effect that any price rise of an important consumption item is often taken as signaling inflation. . . .
I am focused most intently on broad inflation because I believe long-term stable prices to be fundamental to a healthy and growing economy. For the moment, inflation, properly defined, is tame, in my view. And the rise of individual prices does not signal incipient inflation.'
http://www.frbatlanta.org/news/speeches/lockhart_020811.cfm
Dennis P. Lockhart
President and Chief Executive Officer
Federal Reserve Bank of Atlanta
Calhoun County Chamber of Commerce
Anniston, Ala.
February 8, 2011
'So what about inflation? I'll start with what the data tell us. The retail price measures jumped at year end as the price of gasoline rose. But looking beyond the rise in gasoline prices, consumer price increases remained exceptionally modest. In fact, about 25 percent of the consumer's market basket as measured by the consumer price index (CPI) showed declines in December.
A similar pattern is evident at the producer level, where industrial commodities prices were elevated during the fourth quarter. But excluding energy, upward price pressures at the producer level were less evident in the data.
In the most recent FOMC statement, following the January meeting, the committee acknowledged the rise of commodity prices, but stated that "measures of underlying inflation have been trending downward."
Yet inflation anxiety is rising. There seems to be a disconnect between what the Fed is saying and what people are experiencing when they fill up their gas tanks or read about rising food prices around the world. Over the last couple of weeks I've taken note of newspaper headlines. Here's a sampling: In USA Today, "Prices starting to creep higher"; in the Wall Street Journal, "Cost inflation puts a wrench into the works" and "Inflation fears replace other market worries"; in Fortune magazine, "How inflation is turning breakfast into a luxury item"; and just last Friday in the Journal, "Bernanke denies that Fed is stoking inflation." Are the Fed and the public on different planets?
Certainly not. But I do think in the swirl of official statements and public discourse we may be talking about different things. To my way of thinking, the term "inflation" is misused in describing rising prices in narrow expenditure categories (for example, food inflation). Nonetheless, recent price news has encroached on the public consciousness with the effect that any price rise of an important consumption item is often taken as signaling inflation. . . .
I am focused most intently on broad inflation because I believe long-term stable prices to be fundamental to a healthy and growing economy. For the moment, inflation, properly defined, is tame, in my view. And the rise of individual prices does not signal incipient inflation.'
http://www.frbatlanta.org/news/speeches/lockhart_020811.cfm
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