3 ms·
The Fed is still not even hitting its own 2% inflation target. Long-term inflation indicators are showing we'll have below-target inflation for a long time. Peo
by surfmike 12y ago
The Fed is still not even hitting its own 2% inflation target. Long-term inflation indicators are showing we'll have below-target inflation for a long time. People have been saying inflation is right around the corner ever since QE started, and it's nowhere in sight.
I would argue exactly the opposite -- deflation in the short term is something we should absolutely worry about. We know very well how to put a lid on inflation once it starts, but for now we have exactly the opposite problem.
- adventured 12y agoSupposedly is not hitting its own 2% target. The cost of healthcare, tuition, a house, oil, gold, corn, electricity, etc - all have increased dramatically since 2000.
- natrius 12y agoImminent inflation isn't the only problem to worry about. The main problem is investors believing that the market has topped. If we keep rates low and the world's central banks keep buying assets, eventually prices will reach a point that people stop believing. The other option is that when expected inflation goes up, people will predict that interest rates will go up, and as a result, they'll believe that the market has topped. If asset prices drop precipitously, we might be back in 2008 (or worse).