News: Inflation Signals and Fed Policy

Discussion in 'Wall St. News' started by AlexLutiera, Mar 6, 2011.

  1. I just found this article on the web, regarding Economy, Government and Policy.

    Inflation Signals and Fed Policy
    Published: March 5, 2011

    To the Editor:

    Re “The Debate That’s Muting the Fed’s Response” (Economic View, Feb. 27), in which Christina D. Romer described the current dispute over inflation’s causes:

    Ms. Romer classified herself among the empiricists in this debate, citing evidence that the main determinants of inflation are past inflation and unemployment.

    So let’s try this number on for size: In the 12 months through January, the Producer Price Index has risen 3.6 percent Companies are reluctant to pass along price increases for now, but at some point they will either have to do so or go bankrupt. Then we will see inflation greater than the 2 percent that the column described as the Fed’s implicit target. George Thomas

    Warren, N.J., Feb. 28

    A version of this letter appeared in print on March 6, 2011, on page BU2 of the New York edition.