Monday, 27 October 2014

Declining Price Inflation Expectations in the U.S. Hint at QE4.

Compared to one year ago, the break even price inflation rate in the U.S. has dropped from 2.18% to 1.90%...

...a decline of 12.8%. 

This decline in price inflation expectations is one development the Fed could use to "justify" a possible implementation of QE4: the lower it gets the bigger the chance the Fed will intervene and once again step on the monetary accelerator.