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Given high energy prices, the weakening dollar and strong global growth, there are plenty of reasons for concern about price pressure.
Declaring that the weakness of Europe's year-old single currency had created concern about price stability, the European Central Bank raised interest rates today for the second time in three months.
[C10.] Europe Raises Interest Rates The European Central Bank raised interest rates for the second time in three months, declaring that the weakness of Europe's year-old single currency had created concern about price stability.
"We attribute this to a lowering of expectations at the beginning of the year due to transition costs of production onto 3-inch wafers, as well as concern about price erosion for mid-brightness products for use in backlighting," the research firm said.
"We attribute this to a lowering of expectations at the beginning of the year due to transition costs of production onto 3-inch wafers, as well as concern about price erosion for mid-brightness products for use in backlighting," it said.
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However, some ministers expressed concern about prices rising much above their current level.
What surprised bond and currency markets was the Fed's concern about prices falling further.
John Canally, an economist for LPL Financial, said that for the fourth consecutive month, the report raised some concern about pricing pressures.
The group said the increase was significant because since 1982 concern about prices had been declining while interest in convenience and saving time had been on the rise.
Fed, in Raising Rates, Shows Concern About Prices The Federal Reserve raised its benchmark short-term interest rate by a quarter-point, to 3percentt, and signaled that it was more worried about rising prices than about slower growth.
"I am struck by Bernanke's concern about prices when he talks about the dollar as a factor in inflation," said Vincent Reinhart, a resident scholar at the American Enterprise Institute and former director of monetary affairs at the Federal Reserve.
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