Should markets worry about imported deflation?

With many eyes on China, exporting softer consumer prices from one economy to another is not an ideal solution for central banks facing an uncertain inflationary outlook. After its first rate hike in years, investors could look to Japan for lessons.

Price stability is among primary central bank objectives. However, the entanglement of global market dynamics implies that no economy exists in isolation, meaning one country’s green energy policies, maritime shipping disruptions, or even its artificial intelligence use, becomes equally significant in influencing another country’s inflationary outlook.

¬ Haymarket Media Limited. All rights reserved.

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