NFXStreet reports that the COVID-19 crisis with rising unemployment and excessive stocks has led to very low headline and core inflation in 2020, around 0%. This low inflation, together with the prospect of lower potential growth after the crisis than before, has revived the debate on the risk of deflation but economists at Natixis do not believe there is a risk of deflation.

“Financial markets expect inflation in the United States and the Eurozone to normalise in 2021, which is consistent with: the recovery in activity and the reduction in stocks; the upswing in commodity prices from the lows in 2020; the fact that companies will take advantage of the improvement in activity to pass part of their cost increases on to their prices."