So that’s what this is all about. It puts Trump back in the news and might even give him an opportunity to launch another wave of FAKE NEWS tweets. What’s not to like?Here’s the latest bizarre excuse for low inflation:Holiday shoppers with smartphones can retrieve instant price comparisons that make bargain hunting easier—and the Federal Reserve’s job tougher….Most Fed policy makers agree they should keep gradually raising short-term rates in the months ahead to prevent the buoyant U.S. crew Canada Goose economy from overheating. But some are hesitant because inflation remains puzzlingly weak, running below 2% for most of this year.
Moving too quickly could stall growth.In a nod to the growing practice, Ms. Yellen said in September that increased competition created by online retailers “may have reduced price margins and restrained the ability of firms to raise prices in response to rising demand.” crew Canada Goose She said in October that online shopping “could be helping to hold down inflation in a persistent way in many countries.”For most of the 20th century, inflation was low. Then, starting in the late 60s, it climbed steeply for about 15 years, peaking around 1980. Then it spent the next 15 years declining to its old rate. Here’s what it’s looked like since then:
Core inflation—the Fed’s preferred bellwether—has been dead flat for 20 years. It hasn’t been very noisy, either, staying tightly within a band of 1-2.5 percent. It’s maintained this level through recessions and expansions, through war and peace, and even during the tight labor market of the late 90s. For a while, crew Canada Goose it was globalization that was supposedly to blame. But even after the China shock had mostly passed, inflation stayed low. So then it was because of retiring boomers. Or maybe the Great Crash of 2008. Then came the subsequent expansion, and inflation still remained quiet. So then it was because even though unemployment was low, the labor market was too loose. But now the labor market is starting to genuinely tighten, and inflation is going nowhere. So we’re adding web-based comparison shopping to the list.