The economists and central bankers of the US Federal Reserve have a perplexing challenge. The US economy has picked up in terms of GDP growth, but inflation is below the Goldilocks target of 2%. How could economic models be wrong? What, if anything, has changed? It has spurred a serious discussion that suggests that US economy operates differently now. I think the answer is obvious – DEFLATION! We have deflation, just not in an absolute form. We have deflation in the economy like you might have bugs in your house. They are not everywhere, just in places. Overall, the house is mostly clean, but there are some bugs.
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2017 New Year Outlooks With 2017 just beginning, it is worth thinking about some financial and business outcomes that are uncertain and will be consequential in the state of the economy next year. Price of Oil The Trump administration seems more supportive of the broader energy sector than was that of Obama, including coal and […]
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Risk Predictions for the New Year and Interesting Business Cases in 2016 With 2016 just about a week old, I would like to share some risk issues that are interesting to consider in 2016. Federal Reserve Interest Rate Increase Although delayed many times, the Federal Reserve did finally increase the benchmark interest rate. However, inflation […]
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