This report does not give the Fed clear guidance that core inflation's rise in the PPI is topping out, ... It does, however, hint in that direction.

... Sometimes you must seem to hurt something in order to do good for it.

This all but seals the deal on a coming cessation in Fed tightening,

The markets are assuming that the Fed are finished tightening for the year, ... That presumption might prove to be premature. We, and the Fed, will wait and see.

While the rise in core prices is a bit uncomfortably high, this stand-alone report is not evidence that soaring energy prices are feeding into other prices.

The cooling U.S. housing sector should apply a dampener to consumer spending as 2005-2006 unfolds, but some of this could be offset by still-decent job growth.