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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: lurqer who wrote (9163)	11/12/2002 6:20:33 PM
From: lurqer	Read Replies (1) \| Respond to of 89467

For some months I've called attention to possible stagflation by this coming spring. A couple of recent "straws in the wind" remind us of the opposite possibility - deflation. First the most recent FIG: 11/01/2002 NEW YORK, Nov 1 (Reuters) - U.S. inflation leveled out in October after a sharp rise in September as a sluggish economy dented companies' pricing power, a report showed on Friday. The Economic Cycle Research Institute's Future Inflation Gauge was unchanged in October from September's revised reading of 114.6, ECRI said. The flat reading comes on the heels of an 18- point rise over the preceding nine months from historic lows. But the report warned that inflationary pressures could surface once again were stronger economic growth to resume. "If the economy were to pick up speed, the rise in inflationary pressures could be a potential problem next year," the report said. The annualized growth rate, which smooths out monthly fluctuations, dipped to 24.1 percent in October from 26.6 percent in September. The second "straw" is an apparent "rolling over" of the CRB: quotes.ino.com Given these two factors, last week's Fed cut makes more sense. Doesn't mean it will work, just understand why they are trying. lurqer