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

(Feverpitched/Getty Images)
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 Amazon.com,

Jon Hartley is a master’s student at the Harvard Kennedy School 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.

Most Popular

Economy & Business

Shopping Superstitions

It’s the boss-bossiest time of the year, when Americans getting ready to open up their wallets to buy Christmas presents are lectured by illiterate halfwits about where and how to spend their money. The usual demands: Buy local, or buy from small businesses. This is pure nonsense, and you should feel free to ... Read More
Economy & Business

Shopping Superstitions

It’s the boss-bossiest time of the year, when Americans getting ready to open up their wallets to buy Christmas presents are lectured by illiterate halfwits about where and how to spend their money. The usual demands: Buy local, or buy from small businesses. This is pure nonsense, and you should feel free to ... Read More
History

The 1620 Project

On November 11, 1620, the Mayflower arrived on the eastern coast of North America. She had weathered the slings and arrows of maritime misfortune for almost ten weeks at that point, but the passengers thought the discomfort of crossing a small price to pay for passage to the Promised Land. After all, these were ... Read More
History

The 1620 Project

On November 11, 1620, the Mayflower arrived on the eastern coast of North America. She had weathered the slings and arrows of maritime misfortune for almost ten weeks at that point, but the passengers thought the discomfort of crossing a small price to pay for passage to the Promised Land. After all, these were ... Read More
The Capital Note

Palantir’s Eye-Popping Rally

Welcome to the Capital Note, a newsletter about business, finance and economics. On the menu today: Palantir shares skyrocket, a giant of labor economics passes away, Slack in acquisition talks with Salesforce, and Yellen’s plans for Treasury-Fed cooperation. The Palantir Bump: Politics or Product? Palantir, ... Read More
The Capital Note

Palantir’s Eye-Popping Rally

Welcome to the Capital Note, a newsletter about business, finance and economics. On the menu today: Palantir shares skyrocket, a giant of labor economics passes away, Slack in acquisition talks with Salesforce, and Yellen’s plans for Treasury-Fed cooperation. The Palantir Bump: Politics or Product? Palantir, ... Read More
Immigration

What Now for Trump’s Border Wall?

The verdict on the U.S.–Mexico border wall President Trump promised to construct is decidedly mixed as the year comes to a close. The “big, beautiful wall,” as Trump referred to it, reached 400 miles in length by the end of October, when the Department of Homeland Security held a ceremony hailing the ... Read More
Immigration

What Now for Trump’s Border Wall?

The verdict on the U.S.–Mexico border wall President Trump promised to construct is decidedly mixed as the year comes to a close. The “big, beautiful wall,” as Trump referred to it, reached 400 miles in length by the end of October, when the Department of Homeland Security held a ceremony hailing the ... Read More
Media

Wajahat Ali, Ctd.

I gather he didn’t like my comment on his New York Times op-ed on the folly of reaching out to Trump supporters. He snipes, “I await The National Review’s piece on reaching out to Biden voters and reading about their ‘elegy’ and understanding their ‘economic anxiety.’” After the 2016 election, ... Read More
Media

Wajahat Ali, Ctd.

I gather he didn’t like my comment on his New York Times op-ed on the folly of reaching out to Trump supporters. He snipes, “I await The National Review’s piece on reaching out to Biden voters and reading about their ‘elegy’ and understanding their ‘economic anxiety.’” After the 2016 election, ... Read More