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Where’s inflation? Show me the money!

Author: Bob Lang (info)
Website: http://trade-mentor.com
Posted: December 15th, 2006 at 9:33 am EST
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Feeling somewhat validated but not completely, the call for the low (if not non-existent) inflation continues to be the story.  Why did I believe it?  The trend was established a few months back, and we all know it’s not profitable to fight a trend.  This morning’s CPI points to this trend.  As the chart below shows, CPI is not showing any inflationary pressure…perhaps DEFLATIONARY.  A zero headline and core number shows the continued decline of inflation.  The Fed will have no choice but to acknowledge this at their next meeting, and there will be many more inflation readings before their next get together in late January.  Fed funds futures?  Shot higher today as the expectation for easing continues to grow.  Same as it ever was!

 

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