The World Economy... - 20/5/2010

US Inflation Pressure Easing And The Fed Is In No Hurry To Shrink Its Balance Sheet
US headline inflation fell by 0.1% mom in April, compared with +0.1% in March and after remaining unchanged in February. This was the first decline in more than a year, indicating that price pressures remain benign in the US. A pick-up in the costs of recreation was offset by declines in the prices of apparel, the costs of transportation and housing as well as a moderation in the cost of education. Prices of food & beverages, on the other hand, remained stable during the month. Excluding food and energy prices, the core inflation rate, on the other hand, remained unchanged for the second consecutive month in April, after inching up by 0.1% mom in February. Yoy, the headline inflation moderated to 2.2% in April, from +2.3% in March and a peak of +2.7% in December. Similarly, the core inflation rate eased to 0.9% yoy in April, from +1.1% yoy in March and a peak of +1.8% in December. The readings suggest that price pressures are easing in the US, in tandem with the US Federal Reserve’s assessment that substantial resource slack would continue to restrain cost pressures and inflation is likely to be subdued for some time.

The World Economy... - 20/5/2010