Get Ready for More Coronavirus Disinflation, at Least in the Short Run

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While the Fed is engaging in easy monetary policy, it's not enough to abate the demand shortfalls caused by the coronavirus shutdown.

NRPLUS MEMBER ARTICLE I n April the Consumer Price Index (CPI) had its greatest one-month decline on record, with year-over-year inflation falling to 0.38 percent (core inflation, which excludes food and energy, fell to 1.4 percent). Wall Street predicts that inflation will remain subdued below the Fed’s 2 percent target for some time to come, as the break-even interest rate on U.S. Treasury Inflation Protected Securities (TIPS) shows that markets expect inflation to roughly average 0.8 percent over the next five years.

Online inflation as measured by the MIT Billion Prices Project/PriceStats, which tracks prices in real time on a daily basis on websites such as,

Jon Hartley is an economics Ph.D. student at Stanford University and a visiting fellow at the Foundation for Research on Equal Opportunity. He formerly served as a senior policy adviser to the Congressional Joint Economic Committee.


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