Tuesday, March 18, 2008

Here Comes The Stagflation

This report did nothing to stop the Federal Reserve Rate cut.
Inflation at the wholesale level met most estimates in February, the Labor Department said Tuesday, but core inflation, which excludes food and energy, rose more than expected.

Wholesale prices rose 0.3% last month, in line with the 0.3% expected by a consensus of analysts polled by Briefing.com.

Minus food and energy, wholesale inflation rose 0.5%, an increase from the 0.4% reported for January. Analysts had predicted an increase of just 0.2%.
The problem for the Federal Reserve is that a rate cut diminishes the dollar and raises the price of commodities, without a cut we face a deeper recession. The choices are all bad and the pain for the middle and lower classes is just beginning.

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