Gold prices are up $10 bucks today. The wholesale price index was not a good number. While the core rate was flat, food prices were up 1.4 percent. That’s the fourth straight month of one percent or more increases.
Consumer goods prices (which track with the CPI out next week) were up 1.4 percent in March, and now stand at an 8.6 percent annual rate.
Import prices rose 2.8 percent for the year ending in March, and 2.6 percent excluding fuels.
It’s hard to deny that inflation expectations are creeping higher.
And finally, many in the market have come to expect a softer dollar to ameliorate the U.S. trade deficit. Nothing definitive has come from Treasury Man Paulson or Fed Chief Bernanke. At this stage of the cycle, more dollar softness will translate into higher inflation.
The solution to all this? A stronger U.S. greenback. But will we get it?