Inflation Nation

Talk of inflation has been circulating amongst Federal officials, in anticipation of the central bank’s next policy-making committee meeting scheduled for June 24. President James Bullard of St. Louis’ Federal Reserve Bank, in a speech conducted Wednesday, has stated that inflation continues to remain a primary concern for the central bank. To some, this presents a hint of the Fed’s intentions for future monetary policies.
According to David Goldman of CNNMoney.com, “the Fed is now more concerned with keeping prices from soaring out of control than an economic slowdown.”
The Central bank has seen to a lowering of key federal funds seven times as of September and many Fed officials have been eager to offer their input on the Fed’s situation. According to James Bullard, the Federal Bank should leave interest rates unchanged, while Federal Chairman Ben Bernanke openly supports a strong dollar and President Timothy Geither of NY’s Federal Reserve Bank endorses a tighter monetary policy.
Whether the bank’s lowering of funds benefits the economy remains in dispute.
“Although some believe the series of rate cuts have helped prevent the credit crunch on Wall Street from deepening further, the cuts have also contributed to the weakness in the dollar and rising commodity prices,” says Goldman.
So how has inflation presented itself in our everyday lives? Although many would express concern about increasing energy and food prices, according to a speaker CNBC of Yahoo Finance “many consumers may not notice that they’re getting a break on some items they buy every day.”
The Consumer Price Index supports the expected rise of gas and food prices, but general prices have shown little change. Surprisingly, many items have also shown price decreases. The Consumer Electronics Association has stated lower prices for 2008 on products such has cell phones, desktop computers, plasma TVs, and DVRs. Taking into consideration the dropping prices of women’s apparel, theme park tickets, toys, and dinnerware, an additional outlook on the real effect of inflation is brought into light.

CNBC Video

http://www.cnbc.com/id/15840232?video=716254113&play=1