FXStreet reports that economists at Natixis discuss the prospects for inflation in the US.

“What matters for inflation is mainly the functioning of the labour market and wage growth, not other potentially inflationary factors (population ageing, fiscal deficits, money creation, rising costs in emerging countries).”

“There is no reason why the Phillips curve (the relationship between unemployment, wages and inflation) would be different today in the US from what it was in 2018-2019. This is not to say that the functioning of the labour market will not change in the long term.”

“Domestic demand stimulus is not inflationary if it is balanced by a deterioration in foreign trade. The COVID-19 crisis is driving companies to make large cost savings, which is disinflationary.”