Tags: Ron Insana | inflation | economy | consumer prices

Ron Insana: 'Inflation About to Fall Hard'

By    |   Wednesday, 23 July 2014 07:54 PM

With consumer prices having risen 2.1 percent in the year through June, some analysts are beginning to worry about inflation.

CNBC contributor Ron Insana isn't one of them.

"I'll bet a truckload of scarce limes, or a couple bushels of wheat, that inflation is about to fall, and fall hard," he writes on CNBC.com. "Inflationary pressures, particularly in food and energy costs, will likely prove transitory."

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Agricultural commodity prices, outside of meat, have plunged amid expectations of bumper crops around the world, Insana notes. Natural gas prices also have dropped, to $3.76 per thousand BTUs Wednesday. "Power bills are likely to fall this summer," he says.

A flattening yield curve also signals inflation is under control, Insana writes. "The message of the bond market is not suggesting in any way, shape, or form, that the Federal Reserve is behind the curve on battling phantom inflation."

Wage increases are subdued too, running at a 2 to 2.5 percent annual rate, Insana says.

Many economists agree with Insana that inflation isn't now a problem. "The economy and the recovery remain on track, neither too hot nor too cold," Laura Rosner, U.S. economist at BNP Paribas in New York, told Bloomberg in analyzing the latest consumer price data.

The consumer price index climbed 0.3 percent in June.

The Fed "can continue with accommodative policy and let the labor market continue to heal," Rosner said.

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With consumer prices having risen 2.1 percent in the year through June, some analysts are beginning to worry about inflation. CNBC contributor Ron Insana isn't one of them. I'll bet a truckload of scarce limes, or acouple bushels of wheat, that inflation is about to fall,...
Ron Insana, inflation, economy, consumer prices
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2014-54-23
Wednesday, 23 July 2014 07:54 PM
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