re: Fed rate hike or pause?

quote:

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Using Core right now is a bit blind. While energy has dropped in many instances, gasoline has increased every month since December. Food still continues to increase in many instances. While they are excluded from Core because of their volatility, their sustained high rates are driving the stickiness we see with Inflation (including Core). This is an instance where you simply cannot discount food and energy.

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Food and energy are important when it comes to prices, but we’re talking about monetary policy. And both between the volatility and the fact that they’re not very interest rate sensitive at all, they’re not very helpful, if not outright problematic, when it comes to monetary policy.