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Who killed US inflation? Here are the suspects in Janet Yellen's mystery

Labour-force participation remains depressed relative to its pre-crisis norm

Jeanna Smialek | Bloomberg 

Was it the seamstress in Bangladesh, with her low wages? Or Jeff Bezos, with his low prices? Federal Reserve Chair Janet Yellen has labelled this year’s unexpected inflation slowdown a “mystery,” and there are a few possible suspects. Previously, factors such as labour-market slack, falling fuel costs and cheap imports explained why price gains weren’t headed toward the Fed’s 2 per cent goal. Those explanations no longer hold as much water. Joblessness has dropped to 4.4 per cent, the dollar is falling and energy prices have stabilised. A pricing issue with ...

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First Published: Sat, September 23 2017. 22:34 IST