A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.



IBD: Fed, Jobs & Inflation

Before the April 2 report showed employers added a four-year-high of 308,000 jobs in March, many economists weren't expecting an interest rate hike before 2005...

The signs of incipient inflation extend far beyond commodities and import prices, says Lakshman Achuthan, managing director at the Economic Cycle Research Institute...

In March, the growth rate of ECRI's Future Inflation Gauge jumped from 2.2% to 3.3%. Based on past precedent, that suggests a cyclical upturn in inflation is two to four quarters away, he says. Since a rate hike can take six months to work its way through the economy, the Fed ordinarily might be about ready to shift to a tightening mode to pre-empt inflation.

But with minimal inflation having triggered fear of deflation, Achuthan said, Fed officials likely will "hold out as long as they can without losing credibility."