Monday, December 21, 2015

High inflation has not been seen for a while

Monetary policies are still unconventional, with interest rates hovering around zero. While many have assumed that high inflation would be the outcome, in reality the reverse has happened.

Inflation has become lower and lower in the US and the UK. Next year in Eurozone and Japan, inflation is going to stay low, inflation in the US may go higher at the headline level. Growth is below potential. Real interest rates are going to be low.