Ahead of one of the most important Fed meetings in recent memory, the Bureau of Labor Statistics released inflation data for May, which showed the consumer price index rising for the first time in three months. The gains were driven by the shelter component, as rents got more expensive, while the food index fell. While the Fed seems to have been focusing on labor markets to determine the extent of its program of quantitative easing and record low rates, creeping disinflation could stay Bernanke’s hand. Tuesday’s release, therefore, gives the Federal Reserve greater flexibility.
|