Nariman Behravesh
Nariman Behravesh
Nariman Behravesh is Chief Economist at the consulting firm IHS Inc. and author of Spin-Free Economics: A No-Nonsense, Nonpartisan Guide to Today's Global Economic Debates. Directing the entire economic forecasting process at IHS, he is responsible for developing the economic outlook and risk analysis for the United States, Europe, Japan, China and other emerging markets. He oversees the work of over 400 professionals, located in North America, Europe, Asia, Latin America, the Middle East and Africa who cover economic, financial...
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It is encouraging that core inflation in 2005 was no higher than the year before even though we had record oil prices. From that perspective, the Fed can feel confident that inflation won't get out of control.
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While there is no room for complacency, the Fed can take comfort in the fact that core inflation remains tame, despite some modest inflationary pressures. Global Insight predicts that the Fed is near the end of its tightening cycle.
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The fact that we're not getting a spillover into the rest of the economy is pretty good news. The question that core inflation asks: Is the price of everything going to go through the roof? So far the answer is no.
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The Fed can take comfort in the fact that core inflation remains tame, despite some modest inflationary pressures - gradually rising wage inflation, tighter capacity constraints and higher oil prices.
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We will take a hit to growth but we won't fall into a recession.
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Even before the hurricane hit, rising energy prices were having a dampening effect on the economy,
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Rather than the doom and gloom we've been hearing, the consumer hasn't packed it in, and Christmas sales will be reasonably good.
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Of that 8.9 percent, maybe a third of it was weather-related. The rest of it is underlying trend of weakness in the housing market. You are seeing pervasive signs of weakness.
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Both growth and inflation in the coming months could be stronger than financial markets are currently expecting. There is a growing risk that the Fed will have to tighten further and longer than many analysts anticipate.
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Even though consumers may be a little jittery, they haven't stopped spending.
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There's not a lot of relief in sight. I would not be surprised to see the monthly deficit go above $60 billion by fall, and stay there.
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That suggests that we are getting some inflationary pressures building in the pipeline,
feels
When it is up around 6%, it feels a lot worse.
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The problem is the combined effects of the disruptions from Katrina and Rita, plus the ripple effects in the economy from higher energy prices,