Friday, February 19, 2010
Consumer prices rise marginally
In January, consumer prices rose less than expected. The prices without food and energy fell for the first time since 1982 with the fed keeping the interest rate low for an "extended period". CPI rose last month in January by .2 percent which was influenced by a rise in energy cost which also increased by .2 percent. Reuter analysts predicted an increase of .3 percent in january. In 2009, there was an increase of 2.6 percent which was also below market expectations (2.8). Quarterly reports say that the inflation rate will stay where it is now until 2012. This may be due to a change in the White House.
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this is good news in a sense that they are trying will maintain these low inflation rates, but this might prove to be a challenge for us. if we continue to have deficit spending and low inflation rates its going to be hard to find the money to cover our deficit. the government is going to try and avoid raising taxes and by doing this they may end up having to print money which is a bad thing for any country to do.
ReplyDeleteWith the new proposal from the Obama administration to spend 3.83 trillion money is going to have to be generated from somewhere in the economy. Raising taxes will be one way, but even at this rate it seems we will still be running in a deficit which will lead to printing money and more inflation.
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