Although monthly inflation readings have firmed lately, the 12-month change in the PCE price index is likely to remain near its recent low level in the near term.
There are two relevant time horizons here - what should be done, in the form of “battle-field dressing”, to cope with the crisis and get these economies back on the rails again? Then, in the longer term, what can be done to make them less vulnerable in the face of future problems?