With trillions of dollars of fiscal and monetary policy support being injected to fight the coronavirus crisis, we are fielding a lot of questions from clients about the inflationary consequences of these massive government interventions.
Low inflation likely next 1-2 years
Time horizon is important here. Over the next one to two years, inflation is likely to remain very subdued, if not dangerously low. We know global labor markets have been getting hit hard in the short-term as temporary business closures from government containment efforts have led to mass layoffs. In the United States, for