Despite some recent turbulence, owing in part to geopolitical events, stock prices have logged robust gains over the past 3-1/2 years, and broad equity indices have now retraced most of the ground lost between 2000 and 2002. Some of the improvement in the financial condition of businesses is due to substantial efficiency gains by firms.
But further declines in oil prices and increases in the foreign exchange value of the dollar suggested that inflation would likely  1  See Board of Governors of the Federal Reserve (2015), "Federal Reserve Issues FOMC Statement," press release, December 16, www.federalreserve.gov/newsevents/press/monetary/20151216a.htm. 2  The Committee's Policy Normalization Principles and www.federalreserve.gov/newsevents/press/monetary/20140917c.htm.