These conditions have the potential to have a powerful impact on emerging market economies such as Trinidad and Tobago, when they reach us. As expected, the US Federal Reserve ended its era of quantitative easing at its October 2014 meeting.
More broadly, an inflationary environment may distort portfolio decisions. 7 Ultimately, nominal wage contracts will adjust to reflect a higher longer-run inflation rate. In the short run, however, it has been a long-standing feature of the U.S. economy that nominal wages tend to lag developments in prices; see, for example, Mitchell (1913) and Barattieri, Basu, and Gottschalk (2014).