reality-based educator

Wall Street is hoping an interest rate cut from the Fed in September will solve all the credit crunch/liquidity/mortgage problems. But then these numbers were released today:

WASHINGTON -- The era of imported disinflation may have come to an end for the U.S.

U.S. import prices swelled for a fifth-straight month in July on higher energy prices and another record increase in the prices of products from China, suggesting the U.S. can no longer count on cheap overseas goods to offset domestic price pressures.

The data should keep Federal Reserve policymakers on edge about the risk that high oil and commodity prices, a weak dollar and robust global economic growth will boost inflation in the U.S., even though heightened concerns about global credit markets seem to be outweighing Wall Street's worries about price pressures.

Import prices jumped 1.5% in July after climbing 0.9% in June, which was revised down from 1%, the Labor Department said Friday. The latest figures topped Wall Street expectations for a 1% increase.

The Wall Street Journal says if the higher import prices have seeped into next week's Producer Price Index and Consumer price Index data, then the Fed probably will not be able to cut interest rates for fear of stoking higher inflation.