No inflation worries here

By Geert De Lombaerde Posted on November 10, 2009 at 7:23 am

Dirk van Dijk breaks down the components of interest-rate policy and says the Fed is best off sitting tight for a good bit longer.

While it is true that the implied inflation has been climbing since it almost hit zero last year, it is not at levels that suggest inflation is going to skyrocket. This means that the Fed should be far more concerned about getting the economy moving again. Any move to tighten up monetary policy by raising interest rates would be a serious mistake.

Also: If you read to the end of van Dijk’s piece, you’ll see some thoughts about the price of gold and the idea that — gasp — supply and demand, not a bunch a wily speculators, may actually be driving the commodity’s price.

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Tags: commodities, Dirk van Dijk, Federal Reserve, gold, inflation, interest rate, Zacks Investment Research Inc.  

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