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.  

Deflation? Although we've had a big, big drop in oil prices food prices are still going up. Why that is happening is not because of transportation costs or the cost of labor. With this administration I doubt you will see deflation.

Medium logo 1004316 web  1 Vince Mayer, 2 Rivers Financial LLC | [email protected] | 314‑413‑8665 | http://www.moilrealestate.com

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

Medium spousesbuyinghouses cmyk 01Lee Smith, Spouses Buying Houses, INC | [email protected] | 317‑450‑3491 | http://SpousesBuyingHouses.com | IN Agent # RB14037978

@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?

Medium spousesbuyinghouses cmyk 01Lee Smith, Spouses Buying Houses, INC | [email protected] | 317‑450‑3491 | http://SpousesBuyingHouses.com | IN Agent # RB14037978

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

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