Deflation in 2015, Four charts say YES.....

7 Replies

@David Krulac  

I went to go see James Bullard (CEO/Pres of Fed Reserve Bank of St Louis) speak to the CFA institute in Chicago a few weeks ago.  It was very interesting to hear his outlook on the economy and how accurate the Fed has been with their predictions over the past 5 years.   He was rather happy that his team (St Louis) has been accurate about 33% of the time.  He even laughed that such a low percentage was a win on their end.  Across the board they missed inflation this past year.  Nobody thought it would be so close to 1% and most predicted 2-3%.  So a few hundred basis points in error is a big problem.  He thought that if they continue to fail at their inflation predictions that the Fed could lose credibility (some might already think that :)).  Overall a very interesting outlook on interest rates, inflation, & the labor markets.  

Could we see deflation this year?  Sure, my prediction would be close to the the 1% range of inflation (hopefully I will at least come in more accurate than the Fed).  But I'm no economist.  

Also James Bullard is a big proponent & advocate of QE, he thought it worked and thought it could be used again as our go to unconventional monetary policy tool.  

Some people expect deflation, some expect inflation.. #3 on the best investment list for both situations is real estate.. haha

@Chris Winterhalter  

I'm not a fan of deflation, as the article points out we in the US have not seen deflation since 1930.

I'm also not a fan of QE, though central bankers in Europe, China, and Japan as well as US still are strong believers.  I think we haven't seen the "other shoe" of higher inflation caused by QE.  Part of the reason is that in comparison to other countries we are doing better/less bad.

In the coin flip of deflation versus higher inflation, most economists are on the inflation side  

@David Krulac:

hahaha, I didn't recognize your picture without the hawaiian shirt! hahaha  Doing good.. How's things in big bad PA?

just got back from the Keys, 80 degrees, and didn't wear one HI shirt, saving those for the beaches in OH & IN

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.