Huhhhh ??????

Huhhhh ?????? (Full Version)

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Griswold -> Huhhhh ?????? (5/11/2007 5:40:44 PM)
I actually get it...the whole (govt. identified) inflation thing is a bit off the mark, however, it's all we have to work with. But I ask you... (in http://channels.isp.netscape.com/pf/story.jsp?flok=FF-APO-1333&idq=/ff/story/0001%2F20070511%2F1829670484.htm&sc=1333&floc=NI-mo1) "The Labor Department's producer price index rose to 0.7 percent in April, meeting Wall Street expectations and falling below the March reading of 1.0 percent. The core PPI, which excludes food and energy prices, was unchanged for the second month in a row. ``It looks like inflation is very tamed,'' said Kim Caughey, equity research analyst at Fort Pitt Capital Group, adding that the PPI bodes well for next week's consumer price index and makes a rate increase appear less likely. " Who buys food, cars, houses, skateboards...etc...but for "energy prices"? (Just curious).

minnetar -> RE: Huhhhh ?????? (5/11/2007 5:56:37 PM)
quote: ORIGINAL: Griswold I actually get it...the whole (govt. identified) inflation thing is a bit off the mark, however, it's all we have to work with. But I ask you... (in http://channels.isp.netscape.com/pf/story.jsp?flok=FF-APO-1333&idq=/ff/story/0001%2F20070511%2F1829670484.htm&sc=1333&floc=NI-mo1) "The Labor Department's producer price index rose to 0.7 percent in April, meeting Wall Street expectations and falling below the March reading of 1.0 percent. The core PPI, which excludes food and energy prices, was unchanged for the second month in a row. ``It looks like inflation is very tamed,'' said Kim Caughey, equity research analyst at Fort Pitt Capital Group, adding that the PPI bodes well for next week's consumer price index and makes a rate increase appear less likely. " Who buys food, cars, houses, skateboards...etc...but for "energy prices"? (Just curious). i agree with you as that is crazy. i have seen that consumer spending has gone down based on gas prices. minnetar

selfbnd411 -> RE: Huhhhh ?????? (5/11/2007 6:01:16 PM)
You can have it with (CPI) or without (Core CPI). The reason nobody looks at food and energy inflation is partly because food and energy prices are so volatile they will skew the numbers. Interest rates would bounce around like a ping pong ball. We use the core CPI to predict what the Federal Reserve might do with interest rates. The Fed is always trying to fight inflation, and when inflation gets too hot it raises interest rates. This takes money out of the economy and slows things down. Fewer dollars chasing the same amount of goods and inflation goes down. For the past few years, though, prices for energy and food have been rising because the rest of the world is consuming more of these resources. The Fed is basically powerless to control the world's economy, so if the Fed raised rates to stop energy/food inflation, it would destroy the domestic economy. And prices would continue to go up because it's the rest of the world that's consuming. The market is rallying on this news because it means that inflation is not a problem, but economic slowing is. The Fed might cut interest rates, stimulating the economy. If interest rates on a bond or a CD drop just a bit, it makes cash investments much less attractive than stocks. Money will flow in, stocks will go up.

subfever -> RE: Huhhhh ?????? (5/11/2007 6:26:53 PM)
quote: ORIGINAL: selfbnd411 The Fed is always trying to fight inflation... OMG... that's hilarious.

Tuomas -> RE: Huhhhh ?????? (5/11/2007 6:40:50 PM)
quote: ORIGINAL: subfever quote: ORIGINAL: selfbnd411 The Fed is always trying to fight inflation... OMG... that's hilarious. Some things are not black and white [;)]

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