Seeking Alpha

Fed Open Market Committee: Eyes were on inflation, but no surprises here: Longer-term inflation...

Fed Open Market Committee: Eyes were on inflation, but no surprises here: Longer-term inflation expectations are "stable," underlying measures are "subdued." Commodities pricing effects still "transitory"; near-zero rates maintained and will be for "extended period"; QE2 to end on schedule in June; unanimous vote.
Comments (12)
  • erniem
    , contributor
    Comments (566) | Send Message
    Thank God inflation is stable. I'm only imagining my food, gas, and medical bills are skyrocketing.
    27 Apr 2011, 12:36 PM Reply Like
  • birder
    , contributor
    Comments (1235) | Send Message
    Stable? What are they drinking? And how much?
    27 Apr 2011, 12:38 PM Reply Like
  • Joe Morgan
    , contributor
    Comments (1532) | Send Message
    Yes, you are imagining....CPI index up only 2.7%.....


    Peasants trying to make things for politics bandwagon...
    27 Apr 2011, 12:39 PM Reply Like
  • Silentz
    , contributor
    Comments (713) | Send Message
    Right. CPI. Which doesn't include food, gas, and medical bills. Those are 'too volatile' to measure in the "real" inflation. Except when the volatility is only upward. Then it's a real issue. Maybe not for the bean counters who are interested in keeping COLA increases down on SSI, but for those of us that actually have to spend money on those things.
    27 Apr 2011, 12:41 PM Reply Like
  • Joe Morgan
    , contributor
    Comments (1532) | Send Message
    The CPI index INCLUDES gas and food prices, the one you're mentioning is the Core Index.....


    Oh, boy, who can take you seriously with such an ignorant claim?
    27 Apr 2011, 12:43 PM Reply Like
  • Uncle Pie
    , contributor
    Comments (3284) | Send Message
    commodity inflation has been "transitory" since 1933 when we went off the gold standard. Since then our money has lost about 97% of its purchasing power.
    27 Apr 2011, 12:41 PM Reply Like
  • kaziim
    , contributor
    Comments (49) | Send Message
    Fed's even contradicting themselves in the statement. 'Commodity prices have risen significantly since last summer...' 'The Committee expects these effects to be transitory'. How transitory can the effects be when it lasts a year?
    27 Apr 2011, 12:42 PM Reply Like
  • kmi
    , contributor
    Comments (4216) | Send Message
    My guess is they won't say it, they don't want to say it, but they know that QE = commodity price inflation = inflation elsewhere, and they know that when QE ends, commodity prices should drop, ending commodity based inflation.


    But the gas is still on, sooo.. buy buy buy?
    27 Apr 2011, 01:18 PM Reply Like
  • jd123
    , contributor
    Comments (173) | Send Message
    I see... Well, this was the most probable outcome. Maybe they'll follow the script from last time: Let QE expire as scheduled, raise false hopes of rate increases, then crush them with a fresh round of QE. I doubt it will be identical though, that would make them too predictable... Maybe this time, they'll bring the fist down much harder when they announce QE 3.


    If, as some people fear, there is a budget and debt ceiling stalemate that leads to a government shutdown, panic selling of Treasuries and a new financial crisis, the happiest man on earth will be Ben Bernanke. All he'll have to do then is sit around and do nothing for a month or two while the financial world burns and the Dow plunges several thousand points, and then go to a cowed and compliant Congress asking for "temporary" emergency powers to deal the crisis. He could then unleash a devastating new round of super-QE that results in the Fed controlling 50%+ of the Treasury market... Now I think this scenario is far more likely to not happen then happen; many dominoes that even the Fed can't control would have to fall in just the right way. But it's something I'm keeping in mind as Bernanke's plan A+.
    27 Apr 2011, 01:39 PM Reply Like
  • Dawgeatdog
    , contributor
    Comments (83) | Send Message
    Rumor has it Bernanke first adopted the word, transitory, to characterize inflation when he first heard Robert Mugabe use it in the same way in a speech at the UN.
    27 Apr 2011, 01:46 PM Reply Like
  • valueinvestor123
    , contributor
    Comments (327) | Send Message
    Transitory meaning that this is the transition from low inflation to high inflation.
    27 Apr 2011, 08:46 PM Reply Like
  • sonthy
    , contributor
    Comments (7) | Send Message
    Why market keep moving up with all bad news came out? Jobless claimed, GDP. It's fake rally? I'm shorting this market like QQQ, SPY, DIA.
    28 Apr 2011, 03:48 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs