Should the Fed keep interest rates low? Yes, say bankers and oilmen

With the Fed Funds rate officially set in a range between zero and 0.25 percent, the only direction for them to go is up. But when the Federal Reserve will actually raise interest rates remains an open question. A stock-market rally that seems to foretell an economic recovery has been clashing with weak fundamental data, placing the Fed's policy under more scrutiny of late. Prices for oil and gasoline have increased dramatically since the start of the year, worrying some that the first signs of inflation from fiscal and monetary stimulus are at hand.

A Bureau of Labor Statistics release this morning showed that the Consumer Price Index has declined 1.3 percent in the last year, the largest drop since 1950. On a month-over-month seasonally adjusted basis, the CPI rose 0.1% after being flat the prior month. A similar BLS release of the Producer Price Index showed a 5 percent decrease year-over-year in the cost of finished goods. In May, the PPI was 0.2 percent higher compared to April, on a seasonally adjusted basis.