What should we make of the fact that core inflation in the U.S. is just as low as in the Eurozone [10] if measured on the same basis? (Can you say "depression", boys and girls?)
David Rosenberg – former chief economist for Merrill Lynch, and now chief economist for - comments [11]:
I don’t know whether to feel good or uneasy about the fact that 90% of the industrialized world economy is now anchored by near-zero or negative short-term rates. At one level, this should be supportive of risk assets; at another level, it is a symbol of how fixed-income investors and central banks see the world — deflation at a time of ultra-low rates is certainly not a confidence builder.
Remember, quantitative easing actually leads to deflation [12] in the long-run.
