Sunday, October 17, 2010
CPI: Inflation rate stays uncomfortably low
The consumer price index is slightly over last years rate but still uncomfortably low for the Fed's liking (it rose 1.1% since last September). The results continue to point toward the Fed buying additional long-term treasury bonds -- capital is still too cheap. The CPI report was significant because policymakers used the data to determine Social Security beneficiaries in 2011. However, due to the negligent amount of inflation, they will not receive a cost of living increase.
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In my opinion this minimal increase in the CPI is both a bad and good thing. Although I do feel for those who will not receive increases in Social Security, it is a good sign that there hasn't been a large increase in inflation.
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