Deflating Expectations

n a Reuters poll out this week, most economists say they are expecting more robust inflation this year, to the tune of 2 percent. The poll accurately reflects the plethora of emails from research firms in my inbox—a slowly building chorus predicting rising prices along with an uptick in overall economic activity.

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Who's Afraid of Chained CPI?

As the fiscal cliff talks evolve and devolve, the latest spat has been whether the arc of federal spending should be curtailed by changing the way that we assess costs. The proposal from the White House is to switch the way cost-of-living adjustments are made for Social Security benefits. Rather than pegging those to the Consumer Price Index as currently calculated, these would be pegged to a "chain-weighted" Consumer Price Index, which would save as much as $125 billion in additional benefits over the next decade.

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