Chris Rupkey Inflation Quotations

Unfortunately, I think they tried to fight the inflation dragon a little too long, and rejected the counsel of the markets which urged them to cut rates as early as November that year.

Growth isn't fast enough that the Fed has to brake the economy, and at the same time it isn't slow enough that the Fed can stop and watch. Inflation pressures can still gain a foothold as the economy continues to take up slack resources.

Prices received rising so much is the first sign that businesses have increased power to pass on these energy-price increases. Energy will shortly be a major factor in the inflation equation, and this is what the Fed is worried about, so expect policy makers to keep pushing interest rates higher.

They're not on the sidelines yet. The inflation pressures are immense at this stage of the business cycle.

It may be just a matter of time before the public's inflation expectations start to rise. Commodity prices are soaring.

This is consistent with the idea that slack resources have been taken up in the economy. There is considerable momentum and this is the sort of environment where inflation pressures can spill over and actually cause an increase in the rate of inflation, so it is a bit early for them (the Fed) to lay down their saber.

Higher energy prices are not providing any big headwinds for the economy and inflation remains very contained,

The economy surprised on the upside and inflation was a surprise on the upside so (10-year Treasury) yields tested the level we hit last week which was 5.14 percent.

The details of the GDP report may have given Treasuries a boost as the Fed's preferred inflation target, the core personal consumption expenditures index, was revised down to 1.7 percent from 2 percent for the first quarter,