At least for now, the Fed is coming away looking smart when it embarked on an aggressive nine-month rate-cutting strategy that sent its key lending rate down to 2 percent, a negative real interest rate when compared to inflation.
See Baur's comments in video at left
Though the central bank will likely hold the line on rates today, the decision wouldn't have been as easy had inflation—and gas prices in particular—continued to escalate.
"I'm not sure the Fed is really in as much of a box as people think," Bob Baur, of Principal Global Investors, said on CNBC. "We don't believe inflation is as much of a problem as it appears."
What Could Take Prices Higher
Some, though, think a reversal on fortune is only one market incident away.
"I think it's a positive, certainly," said Kevin Kerr, chief analyst at Resource Trade Alert. But, he cautions, "I wouldn't read too much into it. I don't think the Fed has been right about inflation. We had a parabolic rise in a lot of these commodities. ... Now we're getting a correction, and you've seen an overcorrection in some instances. I anticipate that this is probably short-lived."
Oil prices could spike back up once demand for winter heating oil kicks in. Also, some analysts note the recent popularity of the short-oil trade—a bet that energy prices will drop—that will change once those positions are covered.
"I just really question whether we're ever going to get back to $100 and whether it can sustain that price," Kerr said. "There's a lot of resistance below $120. We can maybe break down to $100, but it's not going to be able to hold that level for any length of time. The fundamentals are still in place that drove these markets higher in the first place. We still have very strong demand worldwide."
But Schultz believes a general slowdown in global demand will temper any spikes in commodity costs. Grains supplies are expected to be higher this year not only in the US but also the rest of the world, further dampening expectations of massive food inflation.