As everyone is waiting for a another round of stimulus or may be a QE from US because of which there is a bit of tumbling in Gold, Silver & other commodities as well in hope that US will come up with another package.
Also we have already seen that Euro have been upswing because of the Pandemic Emerging Purchase Program which was increased and there was a special package for the European Union as well.
So I think & my observation in the few years we have been witnessing that inflation has been stable or trending lower & despite a lot of QE's which have happened in the last few years ever since the great financial crisis of 2007-2008 had came into existence.
So while inflation has been stable and trending lower this is primarily because of factors like FED policy & constraints on the bargaining power on the part of the labour and the globalisation in the recent past as how it has behave in the recent past.
Also many of the economists have predicted that there may be further fall in inflation by considering global activities on the basis of contraction & the increasing automation.
But I think that COVID impact and the developments which are happening in market dynamics like the changes in financial markets should affect the inflation rate & it should grow from here also & I don’t feel inflation may fall from here.
Also I have observed one more thing that the earlier round of QE which were started after 2007-2008 by FED (which is the central bank of US) which have massively injected QE but that broad money supply haven't entered into real economy.
By considering year 2009 & 2012 assets prices which rise across the globe because of the reserves, etc but the real money was stucked in the Bank Balance Sheet & that did not got penetrated into real economy.
But this time the new QE rounds which are in process across Japan, Europe, US, etc from this real money is definitely getting injected into real economy because of which M2(which is a version of money supply like M1, M2, etc) money supply trajectory is getting changed.
It means the inflation growth coming further is a tough challenge for us & we should diversify our investment portfolios which will be able to beat this rising inflation....
