Based on the latest consumer price report, the Fed has plenty of leeway to keep rates low for some time. Lower energy costs tugged down on the consumer price index in June, resulting in a third consecutive decline in the headline number. In June overall CPI inflation dipped 0.1 percent, following a 0.2 percent decline in May.

The nominal trade deficit unexpectedly widened in May, as an increase in imports outweighed a slightly more modest rise in exports. The $1.9 billion widening, which follows a $0.3 billion widening in April, brings the deficit to an 18-month high of $43.3 billion.

In their most recent chart of the day The Economist shows the inflation adjusted price of gold since 1800. Their editors note that the yellow metal is still significantly lower than its 1980’s highs, but is beginning to look a bit frothy when compared to the same period:

The sharp change in trend in the ECRI’s leading index has been widely reported, however, Goldman Sachs has their own leading indicator and it is exhibiting the same negative trend [ … ]

Bring on the pain.