Expecting less inflation


Here is the associated WSJ article.  Yes oil is down and the Fed did a slight rate hike, but still the broader lesson is that we are moving into economic corridors we do not understand.  I don’t know that any theory has done a good job predicting inflation dynamics.  Wages are showing (finally) some very modest growth, so the “we were in a liquidity trap, deflation was delayed because wages are sticky, finally wage are falling” explanation also seems wrong.  I also don’t think we will be seeing another Fed rate hike anytime soon.


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