Tuesday, April 26, 2011

Transitory inflation concerns?

Janet Yellen of the Fed says that inflation will remain transitory- meaning that inflation fears should be toned down because household wages are shrinking because of oil and food price inflation.

I don't know how to think about this. On the one hand, food and oil prices are on the rise. But, wages are shrinking. This means more to traders and investment bankers than it does for the average person on the street. To them, it's good news. For average folks like us, it is terrible news.

It shows that we don't control the oil and food prices and those prices are disaggregated from our wages.

See attached article: Bloomberg on Transitory inflation
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