Inflation is just not appearing in the broad economic numbers. A fresh report from the U.S. Department of Labor actually is not that fresh, but it is the most recent report on inflation because of a delay from the federal government shutdown. The Labor Department reported that the Producer Price Index (PPI) fell by 0.1% on the headline PPI in September. The ex-Food and Energy PPI, the core PPI, rose by 0.1% in September.
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Bloomberg had estimates for a 0.2% gain on the headline, with the core PPI expected to be a gain of only 0.1%.
What this report means is that the fear inflation is still just a fear. The numbers are not showing inflationary pressures. The long and short of the matter is that this gives Ben Bernanke, and Janet Yellen, room to keep buying up $85 billion worth of Treasuries and mortgage-backed securities until the end of days.
We would encourage readers to remember that this is the start of a two-day FOMC meeting.
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