Sunday, September 16, 2012

Does the August Inflation Spike Mean QE3 was a Mistake?

One day after the Fed announced a new program of quantitative easing (QE3), the BLS reported that headline inflation spiked to an annual rate of 7.44 percent in August. Does that mean that QE3 was a mistake?

Superficially, it might seem so. After all, the announced justification for QE3 was that both parts of the Fed’s dual mandate—unemployment and inflation—have been running well below target. If one of them, inflation, is now above target, that could be taken as a sign for cautious watching and waiting, not a bold new program of monetary stimulus. But not so fast. >>>Read more

Follow this link to view or download a classroom-ready slideshow with charts of all the latest inflation data.

1 comment:

  1. Ed, My views exactly:
    http://thefaintofheart.wordpress.com/2012/09/14/the-headline-on-the-headline-cpi-is-always-misleading/

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