Wednesday, February 20, 2008

Bernanke - the inflationist

US inflation is surging ahead, while the Fed cuts rates. If want a recipe for an economic disaster, then Bernanke is your cook Despite what people might think, he is cooking up some more interest rate cuts

US inflation may stall rate cuts

Energy prices have fuelled the surge in inflation US consumer prices rose by 0.4% in January, official figures show, more than many analysts had forecast. According to the US Labor Department, the main drivers of the price growth were food and energy costs.

The figures come as the US Federal Reserve has been slashing interest rates in an effort to kick-start slowing economic growth. Analysts say that inflation concerns may hamper the Fed when it comes to cutting rates again in the future.