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Inflation watch: CPI out today

Alisa Roth Dec 15, 2006
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Inflation watch: CPI out today

Alisa Roth Dec 15, 2006
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TEXT OF STORY

SCOTT JAGOW: I’m sure the Fed Chairman will be watching this number today: the Consumer Price Index. The CPI is one of those key inflation numbers. Here’s Alisa Roth:


ALISA ROTH: The CPI tells us how much it costs for important things like housing, food and clothing.

The core CPI strikes the more volatile factors in that calculation, like energy and food prices.

Both are expected to have jumped by about point two percent last month.

Zoltan Pozhar is an economist with Moody’s Economist.com. He says that’s just the kind of number the Fed is looking for.

ZOLTAN POZHAR: If this forecast for moderating inflation pans out, that will mean that they will not raise rates any further and that they will cut rates by next spring. And when the Fed cuts rates everything from the prime rate to adjustable mortgage rates will come down and that will also help housing to find a bottom.

He says lower interest rates and lower housing prices will make it easier for more people to buy houses in the coming year. And he says that the lower energy prices that are pulling down the CPI will also continue into next year.

In New York, I’m Alisa Roth for Marketplace.

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