In short, repaying long-term public debt requires two almost essential components: For indebted economic agents, whose loans tend to be variable-rate, a drop in interest rates is generally good news. Prices of all other commodities will rise a modest amount this year. That uncertainty poses a cost to the economy. But economists are expecting January core inflation, excluding food and energy, at 0.
You are here: But some market pros say there may be just too much hype about this number, even though some concede the audience for this particular January consumer inflation report is probably the most attentive since the Fed was last in a rate-hiking cycle more than a decade ago.
The imbalance between demand and production, which cannot be prevented through a negative equilibrium real interest rate, leads to a drop in employment and wages, which further weakens demand and causes deflation. With high productivity, high corporate margins, record profits, continuing economic uncertainty and rising commodity costs we're unlikely to see a surge in incomes or hiring in 2012 though I do believe we will continue to see a modest recovery in the labor market.
Stanley expects inflation to firm, with a higher-than-consensus forecast for headline CPI at 0.
Stocks, real estate and gold are traditionally how people hedge inflation risk. There are also retail sales for January at 8: He said inflation should rise this year and it would be a key development for the economy and the Fed.
We calculate the Current Inflation rate see table below to two decimal places while the Bureau of Labor Statistics only calculates inflation to one decimal place. Read more from Anthony Mirhaydari and other top money experts.
Zero or negative inflation is not conducive to achieving an equilibrium real interest rate, since nominal interest rates usually have a minimum floor of zero. Technically, this activity, referred to as the ALCO portfolio, is a kind of carry trade, since the interest earned on the public debt is higher than that paid to the central bank for the provided funds.
You may also be interest in a table of Monthly Inflation Rate data , which shows how much prices have increased over the previous month. Other services will be 2. I now manage personal accounts and write about my analysis and decisions. Even if the price of gold keeps up with inflation, owning gold exposes you to other, far bigger risks. Only a few economists are able to blend in the missing key ingredients: The two contexts share clear similarities.