Salient to Investors:

Companies lacking pricing power have helped hold the inflation rate below the Fed’s 2 percent target for 14 straight months.

Michael Hanson at Bank of America said economists and policy makers don’t see much evidence that pricing power’s going to return quickly or that inflation is going to pick up.

Half of 54 economists surveyed expect the Fed will start tapering in September.

The gap in yields between TIPS and US government debt not indexed for inflation shows investor expectations for the CPI over the next 5 years were at 1.83 percent on July 26.

Kevin Cummins at UBS Securities said the odds are pretty good that the Fed will establish a lower bound for inflation in the next few meetings.

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