NYMEX --- Su (fast)
>> time to take a look at this week coming up, where economic data will include durable goods orders which will be released on wednesday. it will be first revision of first quarter g.d.p. that comes out on thursday. personal income and spending, they get released on friday. also, there are two r.p.o.’s on tap―mastercard and vonage. of course, deliberations continue in the enron fraud trial. so these are some of the things that we’re keeping an eye throughout the week. as for today, we have got crude that’s moving lower because of speculation that higher rates will reduce economic growth, and therefore, eventually demand for fuel. the oil futures are trading down .6% this morning. we want to get more from su keenan.
>> it is a spirited trading session, suzy. certainly after last week’s decline in crude, and one of the biggest we have seen in two months. we are, however, off the lows of session. crude oil, the current contract trading above $68. what is six-week low, but looking ahead to the july contract which becomes the current contract as of tomorrow and that’s trading in the $68 to $80 range. take a look at the one-month charge for crude and you will see how we have come down from the highs that we saw a couple weeks ago. on the rally in gasoline and geopolitical concerns. take a look at gasoline. we’re now at $2.02 wholesale, whereas a month ago we were trading 20 cents a gallon higher. incidentally, the latest lundberg survey says it’s passed through the retail levels and we have seen a decline in gasoline to the average of $2.92. that again, as a result of the decline we have seen in gasoline. the only rebound we’re seeing, take a look at natural gas. this is trading apart from the rest of the energy complex. look back to december where we were at a record number of $15, and we have come down to the $6 level. because of that, we are seeing a rebound. bigger picture, what is going on? well, this is part of the bigger commodity sell-off. one believes it’s the bursting of the bubble. with copper and gold and silver down, he says that oil has also been down. we should point out that we are seeing the metals rebound, and some of the traders on the floor are saying they’re not seeing the liquidation they saw last week. they saw―we’re seeing a stabilization in the sell-off.
>> is stagflation in ben bernanke’s future? that story when we return.
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Listen Focus: Inflation
>> some economists see a troubling pattern developing. higher inflation and slower economic growth. which of course could be spelling trouble for fed chairman ben bernanke and for consumers alike. lindsey arent has more details on it.
>> thanks, suzy. the s-word is creeping back into economic discussions these days. stagflation, of course a phenomenon, last seen in the 1970’s. the question is what does it mean for today’s economy? ben bernanke did fear may face the central banker’s worst nightmare.
>> the nightmare is that the economy starts to slow well below 3%, at the same time that inflation rises well above 3%. and that looks like it’s real risk at what point.
>> some call it stagflation. that is slowing economic growth coupled with rising inflation. soaring energy and commodity prices and a falling dollar all point to the possibility of faster inflation. a recent report showed inflation rising at an annual rate in 2006. the worst start to a year since 1990. it’s led richmond fed chairman lacker to say unfavorable inflation numbers and adverse effects are going to require a higher path for real interest rate and are going to make a pause less likely. the economy will suffer if they have to raise another percentage point to 6%.
>> that will cause a relatively serious slow down in interest-sensitive sectors. things like housing especially. and that individual salaries
