Is the USA facing deflation?

Asked on by kica

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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Of course, no one can know for sure if the country is facing deflation.  If economists could accurately predict what would happen and what to do about it, the country would never face economic problems.

At this point, it does not appear that the Fed is very worried about deflation happening.  The US economy is growing, even if that growth is not particularly strong.  Economic growth of any sort is typically sufficient to prevent deflation.  However, the Fed does still think it is at least possible that deflation would occur.  That is one reason why they recently announced that they will at least consider another round of buying government securities to pump money into the economy if it seems to be faltering.


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