According to the Conference Board, disinflationary pressures are not limited to the Eurozone and can be seen across a large number of the "developed economies". The so-called "Harmonized Indexes of Consumer Prices" or HICP (a measure of inflation that has been standardized based on the EU definition) seems to show consumer prices weakening broadly, with only a couple of exceptions.
In the US the TIPS market seems to agree with this assessment as the breakeven rates remain subdued (see chart). The HICP trend in the next two months will be critical. It will drive the monetary policy trajectory across key economies, particularly in the Eurozone which is now coming to terms with the possibility of QE (see story). |
Monday, April 7, 2014
Disinflationary pressures beyond the euro area
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