Recapping the day's news and newsmakers through the lens of CNBC.
Is low inflation good news or bad?
Folks with pet worries can find a dark lining in any silver cloud, and that includes inflation hawks. For the compulsive hand-wringer, inflation is always too high or too low, or threatening to go too high or too low. And if inflation seems just right, the numbers are too hard to believe.
So reactions ran the gamut today when the government reported the core inflation index was up a mere 1.2 percent in the 12 months that ended July 31. It was the lowest one-year reading since November 2010. Analysts had forecast 1.4 percent, down from June's 1.7 percent.
Instead of celebrating the fact that a dollar buys virtually as much as it did a year ago, many observers invoked the dreaded deflation, which makes debts harder to bear and causes consumers and business to put off spending.
Not only that, but inflation below the Federal Reserve's 2 percent target raises a new issue in the Fed's decision about when to begin its tapering program, to wind down bond purchases that have kept interest rates low.
Many experts have expected tapering to begin in September, and uncertainty could roil the markets and upset business strategies. Atlanta Fed President Dennis Lockhart further confused the markets Tuesday by saying that economic performance is too mixed to permit a fixed tapering schedule. Stocks fell today as traders pondered all the uncertainties.
And today's low inflation figures raised another question: Just how accurate are the government's inflation surveys?
"It's three-card Monte. ... If they can't figure a way to continue the sugar buzz one way, they're going to look at the PPI numbers and the CPI numbers, and they're going to make a case that the old bogeyman of deflation is in the closet. ... I don't believe the government's calculations. There, end of the world, I've said it."
—CNBC's Rick Santelli
"As I see it, a decision to proceed [with tapering]—whether it is in September, October or December—ought to be thought of as a cautious first step. The first adjustments to asset purchases, when they occur, should be the beginning of a process."
—Atlanta Fed President Dennis Lockhart