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FOMC meeting and inflation

Written by A Forex View From Afar on Wednesday, January 02, 2008

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FOMC Minutes 9-1
Mostly, the minutes were concerning the tight credit conditions, the deteriorating market conditions and fading consumer spending.
Also, in the minutes, every time the word inflation appears, it is closely followed by a statement that says inflationist pressure will be reduced, but they don't mention how or why.

This line caught my eye
"Members generally saw overall inflation as likely to be lower next year, and core inflation as
likely to be stable, even if policy were eased somewhat at this meeting;"

Overall inflation will be lower next year? If we use the CPI to measure it, yes, I have no doubts about it.

"Members also recognized that financial market conditions might improve more rapidly than members expected, in which case a reversal of some of the rate cuts might become appropriate."
I don't know, after they say everywhere that inflation will be lower, maybe paving their way for some other rate-cuts, they come then with this line saying that condition will improve.
Also, if inflation will be lower, what is the need of rate-hikes?

Actually, part of the CPI inflation showed this during the spring, prices were to lower. Here they say
"The pickup in core consumer inflation over this period reflected an acceleration in some prices that were unusually soft last spring"

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