Producer Prices Plunge -0.6%

October 20, 2009

The September report on producer prices showed the prices fell by -0.6%.The core rate fell just -0.1%. This means that a weak dollar isn't yet causing inflation, but that may change by next month's report. Oil prices have been rallying steadily.

If producer prices remain well-behaved, then the Federal Reserve can keep interest rates low with less grief from folks like Larry Kudlow or even some fellow Fed members.

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