We expect the Fed to focus on the risks to higher inflation caused by higher energy prices, supply-chain disruptions and the strain on resources resulting from the massive rescue, relief and rebuilding effort now underway.

We expect the combination of solid economic growth and higher inflation risks to push the Fed to raise rates higher than is implied by prevailing bond yields.

[They also focus on two areas - healthcare and energy - where inflation is eating away at spending power.] You either need wages to pick up or inflation to slow down, ... There may be a bit of both in coming months.

Inflation for August was 0.1 per cent
a welcome reduction from the previous months. While increases in bus fares
and oil-related increases are likely to have a negative impact in September,
assuming we have no adverse weather events, food prices are likely to
fall as supply increases. The trend, therefore, should be for the inflation
rate to return to lower levels.This should have a positive effect on inflation
expectations.

Inflation is down to 1.4% excluding energy, so there's absolutely no inflation pressure.

As we went into December and energy was in that hyper-inflation stage, we looked at measures to cut down the costs.