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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (67039)	7/29/2006 7:22:45 PM
From: bond_bubble	Respond to of 110194

Inflation expectation chart from Fed's Website: research.stlouisfed.org As you rightly indicated, as it is based on customer survey (maybe from vendors like grocers selling to consumers), it is highly manipulatable. Similarly, producer price inflation expectation is something that can be measured. For lumber and copper, for instance, the builders get price quote for 3 months or so. The Fed must be surveying these vendors/builders for the producer price cost. All data need not come from the futures market. Actually, some data can come from "Letter of Credit". There is no published chart of the producer price inflation. My belief is that, once the Fed sees, Producer price inflation expectation rise high, they are likely to raise the manipulated consumer price inflation expectation as well and hence raise interest rates. The reason being, the jobs loss starts rising as PPI raises more than CPI. I dont think consumer spending drop is the key indicator of credit bust. It is the manufacturing that is the key: safehaven.com