Commentary
The latest inflation news looks remarkably good, at least on the surface. The Labor Department reported that overall the consumer price index (CPI) for July showed no inflation.
After months of horrific news and no small amount of fear, this seemingly happy result arrived entirely from a 4.6 percent drop in energy prices. The stock market took the news to heart. An hour after the news was released at 8:30 a.m. Eastern time, the benchmark S&P 500 stock price index jumped 1.7 percent on the opening bell. Investors seem to think the good news will convince the Federal Reserve (Fed) to abandon its anti-inflationary efforts, stop raising interest rates, and provide liquidity more liberally to financial markets….