Inflation or Deflation?

By on July 31, 2010

This past week we observed articles expressing concern over both inflation and deflation. First there was Joachim Fels, the co-head of economics at Morgan Stanley, who says the risks are on the inflationary side.

Fels said he believes the Fed needs to end its very loose monetary stance sooner rather than later, as it will push up inflationary pressures across the world, given many emerging nations are importing US monetary policy in a bid keep their exports to America competitive.

There was also St. Louis Federal Reserve Bank President James Bullard who warned the U.S. is closer to succumbing to a Japanese-style deflation than any recent time, which he urged be countered with “quantitative easing.”

Sources: Barrons, Yahoo Finance!

One Comment

  1. Matthew Schacht

    August 1, 2010 at 5:44 pm

    I appreciated your post entitled "Inflation or Deflation," because it concisely presents current competing economic concerns. I found your writing valuable because it was clear, to the point and helped me see how the experts disagreed, which resolves confusion over differing experts in the news. At the very least, with economic forecasts it's nice to be certain about whether or not there is certainty.

    I'd also like to recommend a news site that is helpful by simplifying discrepancies in the news. The site is, and it compiles reports from various news organizations to produce brief videos that represent different perspectives of story. For example, here is their video on the recent warning of deflation issued by the St. Louis Fed: I hope you'll consider embedding the video with your post as a way to provide your readers with even more information to understand what is going on.

    Matt Schacht

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