Lawrence York

Reconsidering the Deflation Risk

Thoughtful article with good perspective ,however I think the Fed has been behind the curve reacting to the financial crisis until just recently. I think the Fed is focused on bank balance sheets and solvency issues first and foremostly doing what is necessary to avert a financial collapse of the credit markets. Certainly the Fed is aware of the long deflation in Japan and of the risk of inflation. But I would not characterize the Fed as focused on either deflation or inflation at the present time.