WaPo - Inflation falls to lowest since 1982

"Government data released Friday showed that a closely watched measure of inflation fell in January for the first time since 1982, potentially giving the Federal Reserve more leeway to keep interest rates at ultra-low levels."

- One must trust government numbers...

"When energy and food costs are added in, consumer prices overall rose 0.2 percent, the Labor Department said. But the core figure is widely considered a more precise gauge of long-term inflation trends."

- So core inflation is 2.4% annual less volatile energy/food. Not exactly "lowest in 28 years."

"The Fed does not think that inflation will be a problem through this year, if only because the economy is still in a wobbly recovery. When people are out of work and don't have as much money to spend as they used to, there's less demand for goods, which keeps inflation down. Institutionally, that's the Fed's view. "

- And the Fed's view on a 10X money supply and trillions in deficits?

"But not every Fed policymaker agrees. In a speech Thursday, St. Louis Federal Reserve Bank President James Bullard said the financial markets are expecting inflation to pick up, citing increased spreads between yields on ordinary Treasury securities and inflation-protected Treasury securities, whose principal rises and falls with prices. If inflation-protected Treasuries are selling at a faster clip, that means people are worried inflation will rise. "

- I'll be keeping my eye on what James Bullard has to say going forward...