The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Monday, July 18, 2011

Told you so #25: Core US inflation now running at 2.9% (Fed target < 2%)

On Friday we learned that core US inflation rose by 0.3 per cent in the month and at a 2.9 per cent annualised rate over the last three months. The chart below tells the core inflation story very graphically. I have been thumping this drum for a long time now in the face of much opposition from Krugman and his acolytes. It looks like the US authorities are dropping their inflation target for the time being, much like the UK central bank has done. The FT reported:

“Core inflation . . . is moving higher at both the retail and wholesale level and the back-to-back readings of 0.3 per cent on the monthly change in core CPI should be particularly troubling for the Fed,” said Conrad DeQuadros and John Ryding of RDQ Economics."