Monday, November 18, 2013

FW: Inflation? What inflation? - Hatheway

Good piece.  “We don't see this [inflation] changing next year, or even in 2015. 


John Broussard

State of Louisiana

Department of the Treasury


From:  Dave Mayo

Sent: Monday, November 18, 2013 6:56 AM
Subject: Inflation? What inflation? - Hatheway


Larry Hatheway | Chief Economist, UBS Investment Bank | GBR


Recent inflation and labour market data from advanced and emerging economies provide insights into price and wage dynamics across the world economy. The main message is pretty simple. There is scant evidence of broadbased increases in prices and wages. Apart, that is, from those countries where inflation has been persistently high for years. Moreover, as my colleague Andy Cates has frequently pointed out, inflation outcomes—on average—continue to come in below consensus expectations.  QE isn't causing more inflation because it's not increasing the supply of transactions money very much, so demand isn't outstripping supply, so output gaps aren't narrowing much.  We don't see this changing next year, or even in 2015. 


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