The Federal Reserve judges that inflation is low enough for it to prolong its third splash of quantitative easing. In Japan, deflation is so entrenched policymakers are opting for radical stimulus to get any inflation. The eurozone is tumbling into a Japan-like deflationary spiral. China has tamed inflation for now. The Reserve Bank of Australia has cut the cash rate to a record low to reverse disinflationary forces. Commodity prices are dropping, even gold. Global bond yields hover at record lows. The narrowing of bond yields over inflation-linked yields shows inflation expectations are falling. Yet, for some reason, warnings about out-of-control inflation persist.
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