In that earlier period, my colleagues and I doubted that we would ever see single-digit mortgage rates again. And, many of us despaired as we listened to borrowers who were convinced that it was wise to “buy now” before prices inevitably rose further.
Certainly, today’s environment of low inflation and stable inflation expectations allows for much more rational business decisions concerning capital investment than we experienced in that earlier period. Although inflation has picked up so far this year, it remains moderate. In this morning’s report, the core CPI was up 1.7 percent from a year earlier; in December, the year-over-year change was 1.1 percent.