CPI unwinds as the Fed runs out of “patience”

From Seeking Alpha:

The euro fell to a fresh 12-year low on Wednesday, extending a broad decline just days after the ECB launched its €1T bond-buying program, while the dollar index soared to its highest in more than 11 years at 98.95, buoyed by expectations that the Fed could soon lift U.S. interest rates. Nearly all now believe the FOMC will remove the word “patient” from its policy statement after its March 17-18 meeting, opening the door for a rate increase in June.

Not so fast. US consumer price growth (annual % change) to end of January 2015 fell below zero.

US CPI

Core CPI is slowing at a far gentler rate because it excludes energy prices (as well as food).

CPI Core

Wage pressures in the manufacturing sector are declining, despite solid job numbers, indicating there is still plenty of slack.

Manufacturing Hourly Earnings

With inflationary pressures easing, why the haste to raise interest rates? I believe that Janet Yellen will move when the time is right. And not before.

One thought on “CPI unwinds as the Fed runs out of “patience”

  1. […] I said: “…. Janet Yellen will move when the time is right. And not […]

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