Coronavirus Crisis May Trigger Inflation

May 12th, WikiFX News - The latest study suggests the 30-year deflation momentum may come to an end due to the coronavirus crisis, indicating re-acceleration of inflationary pressure.

So far, the main central banks in the world have cut down interest rate and increased the bond purchases. And governments worldwide have released stimulate measure with over US$8 trillion to soften the blow of economic shutdown.

This expectation is contrary to a recent consensus that the upcoming global economic recession will deepen the downward trend of inflation, and may even push certain economies into a deflation trap similar to Japan since the 1990s. From oil and copper, hotel rooms and apparels, commodity prices fallen due to the demand curbed by lockdown.

In the long run, inflation appears to be coming, driven by some factors. And transparent expansionary monetary and fiscal policies make the United States probably face higher inflation risks during this period.