U.S. wholesale prices rise for first time in 4 months (2)

08:29, August 18, 2010      

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Economists believe that inflation remains not a problem at the moment and is not likely to become a threat any time soon because of all the downward pressures on wages and prices as a result of the recession.

"Measures of underlying inflation have trended lower in recent quarters and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time," the Federal Reserve said after its latest monetary policy meeting, when it decided to buy more Treasury securities to prop up the economy.

Despite the Fed's belief that inflation risk is currently "balanced," increasing concerns of a possible deflation began to spread among economists and market participants, as a variety of recent economic indicators showed the recovery has lost steam.

Some economists and Fed officials, including Federal Reserve Bank of St. Louis President James Bullard, recently warned that the U.S. might enter a prolonged period of stagnant growth combined with a risk of deflation -- similar to the environment that Japan entered in the 1990s.

Source:Xinhua
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(Editor:黄蓓蓓)

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