I keep reading in the financial press that the Fed is worried about
inflation. Then the articles go on to explain that because of tight
labor markets, the Fed is worried about inflation.
I accept that the Fed is worried about inflation -- it always is --
and embraces that worry. But isn't the source of the current worry
different from tight labor markets? If the dollar weakens, i. e.
Chinese products get more expensive, then the pass through of the
likely higher Chinese prices will mean higher prices in the USA.
Thus, "inflation."
So, is that why the Fed is keeping interest rates steady, and
threatening to raise them if some inflation measure rises? And is
that finally going to through even the yuppies out of work? And then
the housing market will REALLY tank.
Gene Coyle
