U.S. bordering Deflation

According to the Consumer Price Index calculation, current inflation in the U.S. is standing at a rate of 0.4%, which is considered to be relatively low, in fact bordering to deflation.

As moderate inflation is good for the economy and indicates economic growth. An increase in the price level will allow consumers to purchase goods now rather than waiting for a later date. Increasing the demand and pushing the economy to a greater place, however, in the current situation the U.S. government may consider implying the expansionary monetary/fiscal policy to boost the growth and prevent the recession from happening.

While when the rate exceeds 2% they will then consider using contractionary policies to prevent overly high price level. Meantime, some people worried about the hyperinflation from occurring, but that shouldn’t be the case in the U.S. as to have hyperinflation, a 50% rise in price needs to occur per month.

To summarize, the U.S. is closing down to a borderline of deflation, several policies should be considered to set in order to reduce the risk of recession, but beware of overdoing, while citizens no need to worry about hyperinflation from happening.

For further details, visit https://www.thebalance.com/current-u-s-inflation-rate-statistics-and-news-3306139

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