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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (2071)	8/31/1999 11:26:00 AM
From: SofaSpud	Read Replies (1) \| Respond to of 3536

Thread / Inflation Analysts are starting to jump on the bandwagon that the seeds have been sown for an uptick in inflation. In the last 24 hrs., of three analyst reports that mentioned inflation, two were vigourously ringing the alarm bells. One cited the depreciation of the U.S. dollar, which they suggested if sustained could push import prices up 8%, which would in turn nudge the overall CPI to around 3%. Personally, I've always thought it appropriate to distinguish between one-time increases to the level of the CPI, and trends (such as wage spirals) which tend to continuously increase prices over time. A one-time hit, such as a depreciation, should not be cause for tightening. A question to those of you familiar with the Fed's thinking: would they be likely to tighten monetary policy in response to a depreciated dollar?