Threat of Inflation Growing In US

The bell finally may be about to ring in the U.S. economy’s long-awaited bout with inflation.

With growth indicators improving and the Federal Reserve about to ease back on its monthly stimulus program, market talk is intensifying that inflation will arrive in earnest in 2014.

In fact, even if actual inflation does not escalate, the fear of it could be enough to provide a pretty substantial shock to the system.

That’s a scenario envisioned by Jim Paulsen, chief market strategist at Wells Capital Management, who sees “stronger economic growth,” declining unemployment and rising factory utilization leading to “a modest rise in the U.S. inflation rate” that will produce “the first ‘inflation scare/overheat/can the Fed exit fast enough’ panic of the recovery.”


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu