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Inflation concerns in the US, despite Housing Slowdown

Posted by Adrian on November 29, 2006

Amidst of a dramatic slow down in the housing sector in the US. There has been mixed signals on the American economy, namely the possible cut in US interest rates coming into 2007. The American consumer is a resilient one. The credit boom is still in full swing, and fuel, food and energy costs are still relativity high. Which has put pressure on core inflation. There has been a pause by the Federal Reserve with interest rates, believing that the slow down in the housing sector and lower oil costs, pressures on the inflation has eased. We will have to wait and see how dramatic the housing slow down will be, and to what effect it will have on consumer spending. My opinion is the consumer will shift away from housing debt, and move into other debt areas. Namely credit card. It will be interesting to see how the markets handle this. Federal Reserve Chairman Bernanke comments on concerns that inflation may still be a problem, go here for news report

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