Core CPI Up 0.3%; Ben Finds Religion

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Bernanke is now between the “rock” of recession and the “hard place” of the soft dollar, with economic growth slowing and core inflation at 0.3% and rising. The Fed historically wants a core inflation at +0.2%, giving an annual rate of +2.4%, which is considered “price stability”. A rate of +0.3% puts us in the +3.7% annual rate zone, well above the Fed’s comfort level.

Should this trend continue, this is a worst-case scenario of slowing growth and rising inflation. In that case, there’s nothing left for the Beard to do but pray (but those puppy-dog eyes will not get you anywhere):

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com