Salient to Investors:

  • Michael Bryan at FRB of Atlanta said restaurant menu prices do not change as often as many other goods and services so increases signal restaurant owners see inflation rising as sticky prices give a much better idea of future inflation.
  • The sticky CPI, which only includes items with slowly changing costs such as food consumed away from home and car repairs, and other less conventional gauges indicate inflation has bottomed and is increasing but not yet enough to worry the Fed.
  • Lou Crandall at Wrightson ICAP sees nothing to indicate the Fed will overshoot their target for inflation.
  • The median economic forecast does not call for a rise in rates until Q3 2015.
  • Edward Knotek at FRB of Cleveland says a simple measure of the median price change of all items counted by the BLS gives a better reading on underlying inflation than either the CPI  or its core measure, which excludes food and energy prices, because everybody eats and buys gas.
  • Jim Dolmas at FRB of Dallas said 2 gauges tracking rents and one the cost of eating out have the greatest impact on inflation are not rising .
  • Michael Hanson at Bank of America said gasoline and energy prices have a lot of volatility that says very little about persistent inflation trends, and the current data show the Fed is not materially behind the curve in their read on inflation.
  • Laura Rosner at BNP Paribas said relatively minor items such as plane tickets have played an outsized role in boosting price indexes recently, while there are many headwinds keeping a lid on prices like labor market slack and sluggish wage growth.



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