The document discusses the implications of inflation on realtors and the economy, highlighting concerns about potential stagflation amid current economic conditions. As of October 15, 2010, inflation indicators like the CPI and PPI show moderate levels, while commodity prices and a weakening dollar may exacerbate inflation pressures. Understanding these trends is crucial as policymakers navigate the challenges of inflation and employment.

1. Inflation WatchOctober 15, 2010Produced by NAR Research

2. Inflation WatchInflation (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.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)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.

3. Inflation Watch as of October 15th,2010Is inflation around the corner?The consumer and producer price indices (CPI and PPI) appear to be pretty tame in recent months. Headline and core inflation is moderate, underlying PPI CrudeOil prices are steadyGold, other metals and commodities are moving up strongly. Dollar is weakening. A weaker dollar makes imported goods more expensive and adds to inflationary pressure