Deflation Archive

quick update

First, a few of today’s headlines to set the mood: China factory sector close to stalling – Flash PMI Europe Services, Manufacturing Weaken More Than Forecast France’s Manufacturing, Services Growth Slows More Than Forecast Trichet Says Risk Signals ‘Red’ as Crisis Threatens Banks Italian Household Confidence Falls Amid Concerns on Growth, Jobs ...Read More

State of the Union

Some of the risks listed at year end seem to be coming on line, including slower growth out of China, euro austerity keeping a lid on demand in the euro zone, and US fiscal balance too tight for anything more than very modest top line growth, given current credit conditions and the ...Read More

Fed Minutes

The staff still expected that the pace of economic activity through 2011 would be sufficient to reduce the existing margins of economic slack, although the anticipated decline in the unemployment rate was somewhat slower than in the previous projection. Karim writes: Staff still forecasting above trend growth, though not as firm as ...Read More

EU Daily | Trichet remains confident in ECB plan

The euro zone is standing on the deflation pedal hard enough to turn the euro northward when the portfolio adjustments have run their course, which could be relatively soon. And the indications of growing exports are more evidence the currency could bottom and start to appreciate. Like Japan, when relative prices get ...Read More

Re: Tax cuts may heighten deflation risks – NY Fed study

[Skip to the end] (email exchange) It doesn’t make sense in any model this side of sanity. Comments below: >    >   On Sun, Feb 22, 2009 at 7:47 PM, Steve wrote: >    >   Does this make sense in your model of fiscal policy?….interesting >   counter intuitive argument… >    Tax cuts may heighten deflation risks- NY ...Read More

Deflation forecast

[Skip to the end] This is the deflation argument. (See below) Never seen a split quite like this with calls for both accelerating inflation and outright deflation. Which will it be? My guess is inflation for the US as our friendly external monopolist continues to squeeze us with ever higher crude prices. ...Read More

Central bank debate: Is it inflation or deflation?

Here’s how the inflation can persist indefinitely: In addition to the India/China type story for resource demand, this time around nominal demand for commodities is also coming from our own pension funds who are shifting more of their financial assets to passive commodity strategies. Pension funds contributions have traditionally been invested primarily ...Read More