The inability of inflation to take hold virtually anywhere in the developed world has been the defining economic characteristic of the past 3 years.
Unprecedented monetary policy along with the rebound from the worst crisis since the Depression have failed to create any meaningful price rises in defiance of many people who forecast the opposite. The inflation crowd continues to believe that the price rises are coming but on the ground it’s the opposite.
Canada did reasonably well in the crisis and the recovery but inflation remains near rock bottom levels and it’s a struggle to see how inflation will materialize. The latest is a letter from Target Canada obtained by the Globe & Mail. It asks for an across-the-board 2% price cut from its suppliers.
Target is facing some competitive pressures in Canada but this follows a similar move from a successful Canadian grocery giant earlier in the year.
