MacroPolicy Perspectives
MacroPolicy Perspectives LLC

Links from MPP

Links from MPP

Low Inflation: A Sign of Fading Consumer Demand?

Are the recent low inflation readings a signal of weakening consumer demand or a transitory development? The answer is key for thinking about which way the economy and interest rates are headed. In this third blog examining recent inflation developments, I take a look at discretionary categories of consumer spending and pricing and find that there is indeed a correlation between weakness in consumption and inflation. Softer consumer spending comes despite a falling unemployment rate, rising stock markets and elevated levels of consumer confidence. Getting inflation to the Fed’s 2 percent target may require patience on the part of the Fed, but also greater exuberance on the part of the US consumer.

Coronado Julia
Member Login
Welcome, (First Name)!

Forgot? Show
Log In
Enter Member Area
My Profile Not a member? Sign up. Log Out