Last night when going to bed I was worried about the jobs report, which is reported on the second day of every month. The number come out better than expected. good for the economy
Although growth has stalled, we GDP growth is still positive. good for the economy
Typically, the price of food and energy do not feed through to what is called core cpi, what "common" people use to guage inflation. [people in economics use the GDP deflator] However, the rapid increase makes me think they will. If fuel/food prices stablize, then they won't feed through and limit inflation.
The fed is no longer going to accomodate increases in fuel/food prices. At lower rates, the fed is more accomodative (ie so you can borrow money if prices increase). However this causes inflation. For instance, the price of TVs are high because credit is available for people to purchase it. The cheaper the credit, the more people are willing to borrow. The more people willing to borrow, the company can raise the price. If the fed develops a more restrictive policy, inflation will reduce (because people will be forced to buy less as they cannot simply borrow the increase in price). This is also good for the revaluation of the dollar. All in all, a good thing.