Is the CPI about to show a big increase?

Going against the grain, John Crudele at the New York Post foresees an unexpected jump in the Consumer Price Index in coming months (link):

The Federal Reserve has another problem — it just doesn’t know it yet.

The Fed didn’t make any change to the interest rates it controls at the policy-making Open Market Committee meeting yesterday and said “inflation is likely to be subdued for some time.”

Well, maybe not for long — at least as far as the government’s statistics are concerned.

Is he right? I don’t know, but I do know that most people (especially bond traders) seem awfully complacent about inflation these days.  It would be interesting to see how the markets react to a larger-than-expected increase in CPI.

Tuition continues to rise faster than CPI

Inflation Watch readers who worry about deflation will be reassured to learn that the cost of a college education continues to rise rapidly:

Glenn Reynolds writes: “With only a few exceptions (like being admitted to Yale Law School or CalTech) I strongly recommend avoiding student loans. And I wonder — when you’ve got an industry whose prices have skyrocketed on a combination of consumer ignorance and cheap credit, what happens when consumers wise up, and credit gets harder to come by?”

A double dip in real estate?

Mr. Market doesn’t think so:

Does this look like a double dip?

Steel companies worried about increasing input prices

In early May, the World Steel Association (worldsteel) repeated its worries about “the recent unprecedented rises in the price of iron ore and metallurgical coal.” The industry warned that these prices are pressuring margins and are threatening to increase inflation pressures in various countries. The industry also worries that price volatility will increase with the change from annual to three-month spot pricing.

See “The steel industry repeats alarm over recent developments in raw materials markets” for more details.