Global monetary policy
The central bankers' burden
Deflation is not imminent but the rich world’s central banks must be ready to do what they can to fend it off.
America’s recovery faces the headwind of expiring fiscal stimulus at a time when underlying inflation has already slipped to around 1%; outright deflation cannot be ruled out.
What expiring fiscal stimulus is that?


These things are harder to do in practice than in theory. Past purchases of government and private debt have already drawn accusations of political pandering and distorting the allotment of credit. The longer interest rates stay low in the rich world, the more capital will flee to emerging markets where rates have risen to combat inflation. This threatens to create the next batch of bubbles.
Low rates = Bad. MMkay?