So is inflation an issue as Sarah Palin has in her inarticulate way suggested?
The media, as represented by the newspapers above, not only accept the Consumer Price Index as released by the Bureau of Labor Statistics, but also: (1): accept the rationale that food and energy prices should not be included in the price index because of their excessive volatility, and, (2): notify readers that such low inflation “bolsters” the Fed’s case to continue pumping up asset prices. Note that both papers link the happy inflation news to the $600 billion purchase with the word “bolster.” This has the whiff of a press release delivered by the Fed to the media.
It went unnoticed how the Bureau of Labor Statistics (BLS) relieved the volatile food and energy prices of volatility. The BLS also relieved the CPI of “extreme values and/or sharp movements [of prices] which might distort the seasonal pattern [which] are estimated and [are] removed from the data.” So out went milk, cheese, oil, and cars from the CPI, if they did not meet the BLS volatility criteria. (The excisions also include non-edibles and non-combustibles, including cards, trucks and textbooks.)
The Big Picture