1

If you are seeing prices falling for goods that normally don't drop in price, I think that would be a warning signal. What's a little more concrete signal that we may be entering a deflationary period?

flag

1 Answer

0

The Federal Reserve would probably know that deflation was coming and would lower the interest rate it charges to member banks.

link|flag
How about before the Federal Reserve lowers the rates? How would you know before they did (I'm not saying it is easy). – David Smith Nov 6 at 0:40
and if the interest rate were effectively zero, then what would the Fed do? charge negative interest? – shabbychef Jun 5 at 20:08

Your Answer

Not the answer you're looking for? Browse other questions tagged or ask your own question.