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Commodities Challenge Bernanke Inflation View: Chart of the Day

Record prices for industrial commodities may challenge Federal Reserve Chairman Ben S. Bernanke’s view that raw materials will create a “transitory” boost in U.S. inflation, according to Euro Pacific Capital Inc.

The CHART OF THE DAY shows the Journal of Commerce-ECRI Commodity Price Index reached the highest since at least 1985 yesterday after the Fed more than doubled its balance sheet to $2.6 trillion in the past three years. The difference between yields on two-year Treasuries and inflation-indexed debt, a gauge of expectations for consumer-price gains, has climbed with commodities to reach a 33-month high this week.