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Inflation watch1001


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Inflation watch1001

  1. 1. Inflation Watch<br />October 1, 2010<br />Produced by NAR Research<br />
  2. 2. Inflation Watch<br />Inflation (price change) is important for REALTORS® because changes in prices in the economy can lead to shifts in interest rate policy by the Federal Reserve Bank.<br />During the current financial crisis, fears of deflation were present in news reports (deflation can lead downward spiral of prices that destroy an economy similar to what happened in the Great Depression)<br />While talk of deflation is less, some are fearing that inflation in the coming years may lead to another unpleasant economic condition called stagflation (high unemployment and high inflation) that makes it difficult for the central bank to combat inflation due fear of further job market deterioration. <br />
  3. 3. Inflation Watch as of October 1st,2010<br />Is inflation around the corner?<br />The consumer and producer price indices (CPI and PPI) appear to be pretty tame in recent months. <br />Headline and core inflation is moderate, underlying PPI Crude<br />Oil prices are steady<br />Gold, other metals and commodities are moving up strongly. <br />Dollar is weakening. A weaker dollar makes imported goods more expensive and adds to inflationary pressure<br />