May 1, 2013

LIVING IN A TIME OF GLOBAL DEFLATIONARY PRESSURE:

Fed Presses Ahead With Bond Buys as Inflation Slows (JON HILSENRATH, VICTORIA MCGRANE and BRIAN BLACKSTONE, 5/01/13, WSJ)

U.S. inflation has moved noticeably below the Fed's 2% goal, part of a global slowdown. This has taken pressure off the Fed and other central banks to pull back from their efforts to boost growth by pumping new money into the world economy.

The European Central Bank could be the next to act. It is widely expected Thursday to cut a short-term benchmark interest rate in response to the shrinking euro-area economy and slowing inflation.

The Bank of Japan, meanwhile, has drastically ramped up bond purchases this year in an effort to lift inflation to 2% after long stretches of falling consumer prices during the past two decades.



Posted by at May 1, 2013 8:39 PM
  

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