Todd Ganos, Contributor I write about everything from specific
stocks to economics to politics The greatest fear the Fed
Chairman Bernanke – as well as the entire Federal Open Market
Committee – is a sharp rise in inflation. Such a move would put
pressure on the FOMC to combat inflation with higher interest
rates. But, doing so would likely be counter to the Fed’s
additional mandate to foster employment. The very long-term
average rate of consumer-level inflation in the United States
sits around 2.3 percent per year. Of course, there have been
periods of higher and lower inflation. And, how inflation has
been calculated over the years has changed. In this column we
noted that the U.S. Department of Labor – which is the Federal
entity that computes Consumer Price Index inflation – changed
its methodology five or six years ago. If we examine the
behavior of inflation over the past 10 or so years, we would see
that the rate of inflation had been consistently moving up until
the Great Recession hit in 2008. Note