Bond prices last summer suggested consumer prices in the United States were expected to rise only
1.4 percent annually over the next five years; that soared to 1.96 percent in late January.
The Low-Inflation World May Be Sticking Around Longer Than Expected -
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There is a worldwide glut that includes oil wells, steel plants
and eager would-be workers, and it will take more than a United States presidential election and a few months of solid global growth to fix it.
If the economy works the way the textbooks say it should,
that should feed back into higher incomes, higher consumer demand and higher prices in the months ahead.
Finally, after an uptick in oil prices in 2016 and an abrupt shift in sentiment after Donald J. Trump’s
election in November, it looked as if the world economy might be getting jolted out of that cycle.
But absent something surprising, it looks as if the most likely course is a lengthy grinding process: The global demand for goods
and services slowly rises until the supply glut gradually gives way to tighter labor markets, and the world economy becomes constrained by its industrial capacity.
In the United States, a key inflation measure favored by the Federal Reserve passed over that 2 percent level for the first time in five years.