CERF Blog

The BLS provided the October Consumer Price Index release today.  The October core CPI year-on-year growth was 0.6 percent.  This is the lowest growth of this measure since 1957.  This rate of growth is low enough that the Fed is concerned that price growth is too low.  In an economy characterized by weak demand, weak… Read more

Finally, people are starting to see the problem with the United States economy.  This piece is typical.  For over a year now, we have been warning that the United States could be facing a long period of slow economic growth, similar to what Japan has seen for the past couple of decades. Seeing a problem… Read more

Producer price growth has been declining for six months. It reached negative territory, deflation territory, three months ago, in April. This is extraordinarily unusual for the United States. What does it mean? Most of the June PPI deflation was due to declining food prices. Producer prices are up from a year ago, where of course… Read more

Recent data releases show that Core inflation as measured by the Consumer Price Index, excluding food and energy, has been falling rapidly for 4 months now. This is despite recently strong real consumption growth and despite the overall Consumer Price Index holding steady, see chart nearby. Usually, at least in the past ten years, if… Read more

After the kids went to bed last night, I checked the web to see if there was anything new. The Wall Street Journal posts the next day’s op-eds the evening before print publication. So, I checked those out. I started reading a piece by Judy Shelton provocatively titled The Fed’s Woody Allen Policy. Hey, I… Read more

Japan stepped up their purchases of United States Treasuries during October to $105 billion dollars, boosting their total holdings of United States Treasury Issues to $731 billion, more than 10 percent of the total market. Japan and China are typically the largest purchasers, by far, of United States Treasuries. Why do we care about this?… Read more

Most people are concerned about potential inflation, but deflation is the immediate worry. It is easy to see why the concern for inflation. Big deficits and big increases in the monetary base usually lead to inflation. However, inflation is not inevitable. For inflation to occur, increases in the monetary base have to be translated to… Read more