Fed's Barkin: Inflation is low. That's a victory, not a defeat

Fed's Barkin speaking

• Inflation is low. That's a victory, not a defeat
• Consumer spending is incredibly strong
• risks more tilted to the downside than balanced

That's a new way of looking at inflation this week....

Of course inflation used to be that invisible thief, that stole money from consumers pocketbooks. Central banks and consumers alike were more concerned of inflation. If inflation expectations are high, it can lead to a self-fulfilling prophesy during growth times..."just because". Businesses feel that they should move up prices and that begets higher prices.

Now the pendulum is turning a bit where talk is about no inflation. That can lead to inflation expectations falling, which can keep prices steady or even decline. That may because of more transparent prices online from the likes of Amazon, or more efficiency, or even globalization or "just because you think you can't raise prices and sell your goods".

The end result, is businesses are scared to raise prices and it begets a downward bias to inflation.

In any case, Barkin seems to be having a "throw back Friday" view today where slaying that thief inflation is a good thing.