DaveWentzel.com            All Things Data

September 2008

CPI and Inflation

 

There's been a lot of talk lately about inflation...specifically about lowering the fed funds rate to get us out of this credit crisis.  Generally lowering the fed funds rate risks further inflation.  Some pundits have been saying that inflation is not an issue since the price of oil has radically fallen from $145 to $100, the price of gold has fallen, the buck has risen, etc.  I don't want to argue the merits of rate cuts...only to show that we should NOT rely on the CPI or government inflation data to determine what true inflation really is.