At the present time, the debate is over the extent of that slowing – whether it will be enough to take the pressure off prices, or whether it might in fact be too great, resulting in unduly weak economic activity. Observers have had a hard time this year deciding which of these problems was the larger concern.
Early in the year, a string of biggish monthly CPI readings had everyone very worried about inflation. More recently, declining forward indicators of housing construction and softness in housing prices have seen markets and economists more concerned about a weak economy. Long-term interest rates have retraced about half their rise in the first part of the year.