What the Fed is fighting

The Economist: What the Fed is fighting

THE Bureau of Labour Statistics just released its October consumer price index data. Here's a chart of the year-over-year change in core prices:

In the twelve months to October, core consumer prices rose 0.6%. That's the smallest increase in the history of the index, which began in 1957. That's what the Fed is trying to change, and that's what you need to keep in mind when you hear people warning about runaway inflation.

Comments

[Richard H]

Are rising food costs (a) not reflected in this, or (b) illusory?

[Michael W. Kruse]

Richard, I'm not certain about the various components. Certainly housing costs have dropped and that is a sizable piece of the picture. I'd have to do more research to say for sure.