A woman shops at Sam's Club Division of Wal-Mart stores, in drunk 4. June 2009.
Credit: Reuters/Jessica RinaldiBy Ann saphirCHICAGO | Thu 28 Apr 2011 3: 57 pm EDT
CHICAGO (Reuters)-Ben Bernanke optimistic view about inflationary pressures in the test.
The Federal Reserve and its Chairman on Wednesday repeated its position that the increase in prices of commodities – oil and food – "transitional."
But a growing number of American consumer products companies say that they want to push their sales prices on big jump in the cost of fuel and other raw materials.
Procter and Gamble and Kimberly-Clark Corp. say they will charge more napkins, toilet paper and detergent; Colgate-Palmolive what increases the price of toothpaste.
This is bad news for consumers, already beset by rising gas and food prices.
Yet even the Fed policymakers, who raised the alarm on inflation have supported the Central Bank's decision Wednesday to let the $ 600 billion purchase of bonds program to its planned completion in June.
"Unfortunately for inflation hawks is simply not strong enough, it's not big enough, the pass-through to create their own unique principles of the directive," said Richard Hastings, consumer strategist at the global strategy of the Hunter, energy prices.
By the end of the year predicted that it will be.
"You're starting to see the emergence of a sufficient quantity of inflation for fed policy change at the end of this year," he said.
Bernanke argued that super easy monetary policy to the Fed's flying progress towards the central banks of the twin goals of maximum employment and stable prices.
Unemployment, 8.8 percent, declining from its peak last year, and the risk of deflation has receded.
But inflation is rising, the compensation will be more complex, point, Bernanke on Wednesday when asked about the benefits of buying more bonds to push down borrowing costs.
"It is clear that we can get a substantial improvement in production systems without any additional inflation risks," he told his first press conference after a regular meeting of the Fed's policy setting.
Inflation measured by the core personal consumption expenditure price index leapt to 1.5 percent in the first quarter, government data showed Thursday, a jump of 0.4 percent in the previous quarter.
On the bond market as investors priced in the risk that inflation will be running higher than the Fed's preferred inflation gauge range between 10-year Treasury securities and regular government debt in 10 years, of which the annual inflation rate 2.57 per cent in the year 2021, below the last peak of 2.65%.
In the sign of the interest of investors for inflation, the $ 20 billion, the iShares Barclays tips bond traded on the stock exchange, the Fund is trading at its highest level since November 2010.
If the acceleration of inflation, the US Central Bank might have to raise rates quickly turned the tables on countries such as Brazil, which tried to stop the influx of capital, blaming in part on the Fed's policy of near-zero rates. But Fed officials don't expect it to.
Fresh forecasts from the Fed in the Center, see the main index, which excludes food and energy costs, growing between 1.3 percent and 1.6 percent this year, still below the 2 percent target, the Fed's informal.
Subdued inflation the US contrasting with rising prices in many parts of the world.
The European Central Bank empty rates earlier this month after euro zone inflation rose 2.7 percent.
The new forecast also showed the Fed officials now expect significantly higher overall inflation this year between 2.1 percent and 2.8 percent.
Bernanke said, the increase in commodity prices were "essentially all" are not expected to increase and will remain.
"It is not that the power of the Federal Reserve do gas prices, at least not without derailing the growth, which is certainly not the right way to go," Bernanke said. "Our view is that the gas prices is not to continue to grow at a pace of their recent."
Including food and energy price index PCE increased at a rate of 3.8%, the fastest since the third quarter of 2008.
"We have a different opinion as far as the Fed are transitory," said Michael Pond, US rates strategy at Barclays Capital in New York. "We think, whether it's the broader story of commodities and where the economic growth of the market is likely to have an upward structural pressure on commodity prices."
Together with the declining dollar, which increases the cost of imports, would these trends increase inflation for several years, and he said: "the upside risk to inflation is something that the markets should pay more attention."
Yet most economists favor the Fed, at least for now.
Wages, large input, the cost of production is growing only slowly. And they say that consumers worry about employment will balk at higher prices.
"Companies want to talk about transfer costs, and I spoke to them about the need to transfer the costs of the moment," said Michael Feroli, an American economist, JPMorgan Chase. "There is a general weakening of demand was from a little bit."
(Reporting by Ann Saphir reporting Lucia Mutikani in Washington, Richard leong in New York and Jessica wohl in Chicago, editing Chizu Nomiyama)
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