Deflationary in sentence

255 examples of Deflationary in a sentence

Given the deflationary impact of a stronger currency – and the Fed’s general intolerance of deflation – there is good reason to believe that the Fed will exercise caution in raising interest rates.

Even if the Fed ignores deflationary pressure and hikes interest rates more quickly, medium- and long-term rates are still likely to be anchored, given how little yield is available elsewhere in the world.

Fifth, weak profitability, owing to high debts and default risk, low economic – and thus revenue – growth, and persistent deflationary pressure on companies’ margins, will continue to constrain firms’ willingness to produce, hire workers, and invest.

Seventh, monetization of fiscal deficits is not inflationary in the short run, whereas slack product and labor markets imply massive deflationary forces.

With a cyclical mindset and fiscal space exhausted, a new round of quantitative easing (QE2) might be defended as a strategy for mitigating the tail risk of another downturn in asset markets (mainly housing) and households’ balance sheets – and with it the possibility of a deflationary dynamic.

Meanwhile, Europe struggles to find a solution to its deficit and debt problems by treating them with short-term liquidity fixes whose purpose is to buy time for fiscal consolidation and, in the absence of the exchange-rate mechanism, some kind of deflationary process to restore external competitiveness.

The policy of running a federal budget surplus during deflationary times has led to crumbling infrastructure and deteriorating public services, reflected in overburdened hospitals and underfunded schools.

The Negative Rates ClubBRUSSELS – For the better part of a decade, central banks have been making only limited headway in curbing powerful global deflationary forces.

Despite their shared struggles with deflationary pressures, these countries’ monetary policies – and economic performance – are now diverging.

At a time when advanced economies must close their fiscal deficits, current-account surpluses could have a deflationary impact on the global economy.

Such policies have been needed to counter the deflationary pressures caused by the need for painful deleveraging in the wake of large buildups of public and private debt.

With domestic demand in these sectors now contracting sharply, the excess capacity in China’s steel and cement sectors – to cite just two examples – is fueling further deflationary pressure in global industrial markets.

The result is persistent disinflationary, if not deflationary, pressure, despite aggressive monetary easing.

Investors are again making the mistake of pricing bonds in expectation that the downward trend of inflation will continue into deflationary territory.

Clearly, those who have warned that China is following in Japan’s footsteps and heading for a long-term deflationary cycle have been far off the mark.

Presumably, nominal interest rates would move into negative territory only in response to a deep deflationary crisis.

Not only does it run counter to what the ECB has been mandated to achieve; it also implies too small a buffer in the event of a further deflationary shock; leaves too much sand in the wheels of eurozone rebalancing; and makes deleveraging in high-debt countries unnecessarily painful.

Any doubt as to what form that “substantial stimulus” might take were dispelled a few months later, when then-Fed Governor Bernanke delivered a speech stressing the need for a central bank to deploy unconventional measures to mitigate deflationary risks in an economy that was approaching the zero bound.

Tough budgetary criteria and deflationary policies imposed by the Maastricht treaty are blamed for aggravating Europe’s present slump, exacerbating unemployment, and threatening social stability.

Abe is right about one thing: Japan needs to get out of its no-growth and deflationary trap.

But many observers have argued that cheap oil also has a downside, because it exacerbates deflationary tendencies in the advanced countries, which already seem to be mired in a low-growth trap.

In a deflationary environment, lower oil prices appear to make it more difficult for the European Central Bank to achieve its target of an inflation rate close to 2%.

It has suggested that central banks may want to consider higher inflation targets in order to avoid hitting the zero bound in the event of deflationary shocks.

And the common monetary policy that all are being forced to pursue is intensifying deflationary pressures in the weaker countries, while increasing inflationary pressures in Germany.

True, China’s economy is now growing robustly and is not likely to face actual deflation anytime soon, but if China does fall into a zero-interest rate trap, the PBC, like the BOJ, would be unable to offset deflationary pressure in the event of a large exchange-rate appreciation.

With China retaining its under-valued currency policy, dollar depreciation can aggravate global deflationary forces.

Cut off from credit, Argentina entered a deflationary spiral.

Indeed, strong leadership would be needed to negotiate deflationary measures with labor unions, to persuade Germany to accept some inflation, or to navigate Italy’s return to the lira.

“What is important about the budget,” he said in 1970, “is whether it is inflationary or deflationary, not whether [it is] balanced or unbalanced.”

In these circumstances, domestic deflationary policies will only further slow growth – and are helpless to stem imported inflation.

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