McCulley: Inflation vanquished


Back in his chair at Pimco, Paul McCulley declares mission accomplished not just on the war on inflation, but also for the Fed strategy of "opportunistic disinflation," along with what used to be called "pre-emptive tightening."

The man who declared Alan Greenspan had hiked rates for the last time in his career shortly before The Maestro launched a multi-year series of rate hikes, says bond investors should ignore pricing inflation risk into bond yields and the true neutral real interest rte is likely close to 0% over the next few years, implying the Fed Funds rate won't go higher than 2%.

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Comments (5)
  • fred1724
    , contributor
    Comments (67) | Send Message
     
    McCulley doesn't go to the grocery store. Just listens to the CPI lies.
    12 Jun 2014, 09:14 AM Reply Like
  • Herb Smith
    , contributor
    Comments (554) | Send Message
     
    McCulley doesn't say what price index he uses and there are other measures of inflation: wages rates, the producer price index, GDP price deflators to name a few. Do you think they all lie? And your subjective impression from your local grocery store is better?
    13 Jun 2014, 02:47 PM Reply Like
  • fred1724
    , contributor
    Comments (67) | Send Message
     
    The cash register tape is not subjective.
    15 Jun 2014, 07:36 PM Reply Like
  • Herb Smith
    , contributor
    Comments (554) | Send Message
     
    Supermarkets vary prices by store and by region depending on a number of factors (costs, competition, etc.) What makes you think your supermarket hasn't upped prices in your locality alone? Anyway, what makes you think your supermarket is repesentative of national price levels for a representative basket of goods and services? It's like taking a poll with a sample size of one.
    4 Aug 2014, 03:03 PM Reply Like
  • Douglas E. Johnston
    , contributor
    Comments (1773) | Send Message
     
    inflation - let's throw out food and energy - things u actually use - and anything else volatile and trending up. And then subtract some adjustments (hedonic - only an eco can come up with that) for those new appliances that make your life so much better, connecting to the internet and recording your habits, but breakdown so much sooner. I want my old ice-trays back - at least they never flooded the unit below!
    12 Jun 2014, 02:04 PM Reply Like
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