The evidence in half-over-half percent changes in the December CPI report is that upward price pressures at the consumer level are easing back to the Federal Reserve’s two percent inflation objective, and that the improvement is picking up some steam. On net the data point to inflation coming under control and that the “long and variable” lags in the transmission of monetary policy are more visible. However, it is not universal, and some pressures are in places that will tip the Fed’s discussion away from consideration of cutting rates sooner rather than later – primarily in shelter costs. The all-items CPI rose 1.5 ... (full story)