Consumer Prices and Inflation

The Consumer Price Index increased 0.5% in March pushed up mostly by food and energy prices. The core index, excluding food and energy, increased only 0.1%.

Food costs increased 0.8 percent in March and gasoline rose 5.6 percent in March.

New York Times, April 16, 2011
U.S. Consumer Prices Up 0.5%, Pushed Mainly by Food and Gas

2011 U.S. Budget Bill Approved

The U.S. bill designed to cut $38 billion in spending for the remainder of 2011 was approved by Congress yesterday. The bill is a step toward reining in the federal budget. The U.S.’s next focus will be on next year’s federal budget plan and will have to involve a vote on raising the federal debt limit. Without debt restructuring or a raise in the debt ceiling the U.S. will default on federal debt payments by mid-May.

New York Times, April 15, 2011

Congress Passes Budget Bill but Some in GOP Balk

Germany Calls for Greater Austerity Measures in the Eurozone

Germany has led the way for austerity measures in the Eurozone since Greece requested bailout in May 2010. Their measures do not differ much from the political debates in most countries and call for decreases in spending and benefits as well as an increase in taxes and greater enforcement of tax evasion.

Germany will likely continue to push for increased austerity in the Eurozone and specifically for Greece, Ireland, and Portugal as these measures have already been factored into the aid agreements for these three countries.

New York Times, April 15, 2011

Resentment Is Rising In Euro Zone

Budget Deficit Plan and the Federal Borrowing Limit

President Obama laid out a budget plan that would cut federal deficits by $4 trillion over four years. In his speech, budget cuts that would pave the way for an increase in the federal borrowing limit were also announced. The federal borrowing limit will be a focus of debates over the next few months as the U.S. is expected to reach its limit by May 16. A decision on the ceiling is expected by June and maneuvers could be used to delay defaults until July.

Wall Street Journal, April 14, 2011
Obama Stokes Deficit Fight

REITs Remain Marketable

Nine new REITs have been developed for the market this year. These developed securities show that demand still remains for packaged mortgage securities depsite the credit and liquidity failures that were caused by sub-prime mortgages in 2008.

Wall Street Journal, April 13, 2011
Mortgage REITs on a Tear As High Yields Fuel Demand

Europe and the U.S.

The U.S. is not facing the same inflation pressures as Europe. Commodity prices are on the watch list but Janet Yellen calls the Fed's current bond-buying program the "appropriate" solution for the U.S. 

Wall Street Journal, April 12, 2011
Fed Plays Down Inflation
Inflation Concerns Weigh on Treasurys

Dollar Weakens

The dollar weakened against it's basket of currencies last week following the US government's affliction over budget cuts and a looming resolution needed on the federal borrowing limit.

The Federal Reserve's quantitative easing and the decision on the federal borrowing limit are likely to direct the movement of the US dollar over the next few months.

Wall Street Journal, April, 11, 2011
Dollar Still in a Downdraft