Wednesday, October 5, 2011

Fed Economist Recognizes Climbing Price Inflation

Joseph G. Haubrich, vice president and economist at the Cleveland Federal Reserve Branch, writes:
Recently, inflation, as measured by the headline Consumer Price Index, has been running at a sustained clip—prices have risen over 4.5 percent in five of the past seven months, and in July they increased at an annualized rate of 6.2 percent.
He goes on to say that the inflation is likely temporary, but that's what Ben Bernanke said about the housing market when falling prices were limited to the sub-prime market.

With the amount of money the Fed is printing right now, Haubrich is going to be so off that he may end up in my Federal Reserve Bad Forecasts Hall of Fame right next to New York Fed economists. McCarthy and Peach.


  1. All the gains in commodities prices this year has pretty much been wiped out , the dollar is way up, gas prices are falling, inflation expectations are down, and wages are still stagnant. Where is the price inflation supposed to come from? We had double digit m2 growth in late 2008/early 2009, but the highish headline inflation never came until almost 2 years later. I thought it would have been obvious by now that m2 is a useless indicator for inflation, at least in the short term.

  2. MOPE always rules in the days of Legal Tender.