The Lowdown on U.S. Core Inflation
From blog-imfdirect.imf.org
There was a time when U.S. central bankers worried that inflation was too high, and they tried to bring it down. Now the opposite is true: the Federal Reserve is concerned that inflation has remained stubbornly low, and it’s trying to boost prices. The reason: persistently low inflation raises the risk that prices will actually start to decline, a dangerous condition known as deflation. That’s bad news because it makes people less willing to borrow and spend—anticipating lower prices, consumer will put off spending—and could also lead to a fall in wages. To avoid such a damaging spiral of falling prices and wages, ...
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