Post by jeffolie on Oct 11, 2007 15:26:52 GMT -6
Inflation admission sends DOW reeling
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At one point today the DOW was up over 100 points. It plummeted to negative 100 territory before recovering to close off 63 points. The reason for the turnaround? European Central Bank governing council member Axel Weber opened a window and let in some fresh air. He said the bank may need to raise interest rates to a level that restricts economic growth to keep inflation under control.
ECB's Weber Says Interest Rates May Need to Become Restrictive
Oct. 11, 2007 (Bloomberg)
"Price increases are taking place on a broad front and are no longer limited to energy and volatile food prices," he said.
Compare this to the most recent flatulent comments on inflation in the minutes of the Federal Open Market Committee from the September 18, 2007 meeting. The FOMC members "...recognized that incoming data on core inflation continued to be favorable, and they generally were a little more confident that the decline in inflation earlier this year would be sustained. Inflation expectations seemed to be contained, and the less robust economic outlook implied somewhat less pressure on resources going forward."
If you eat, pay taxes, fill your gas tank, you know the Fed's assertion stinks. Even the government's own data point to a distinct change in inflation trends starting in 2004.
With the ECB talking hawkish right after the Fed paves the way for further rate cuts with soft talk on inflation, small wonder the dollar dropped and gold rose.
www.itulip.com/forums/showthread.php?p=17548#post17548
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At one point today the DOW was up over 100 points. It plummeted to negative 100 territory before recovering to close off 63 points. The reason for the turnaround? European Central Bank governing council member Axel Weber opened a window and let in some fresh air. He said the bank may need to raise interest rates to a level that restricts economic growth to keep inflation under control.
ECB's Weber Says Interest Rates May Need to Become Restrictive
Oct. 11, 2007 (Bloomberg)
"Price increases are taking place on a broad front and are no longer limited to energy and volatile food prices," he said.
Compare this to the most recent flatulent comments on inflation in the minutes of the Federal Open Market Committee from the September 18, 2007 meeting. The FOMC members "...recognized that incoming data on core inflation continued to be favorable, and they generally were a little more confident that the decline in inflation earlier this year would be sustained. Inflation expectations seemed to be contained, and the less robust economic outlook implied somewhat less pressure on resources going forward."
If you eat, pay taxes, fill your gas tank, you know the Fed's assertion stinks. Even the government's own data point to a distinct change in inflation trends starting in 2004.
With the ECB talking hawkish right after the Fed paves the way for further rate cuts with soft talk on inflation, small wonder the dollar dropped and gold rose.
www.itulip.com/forums/showthread.php?p=17548#post17548