Corporate balance sheets are strong and flush with cash, and broad stock price indexes are up more than 10 percent so far this year. At the same time, yield spreads on corporate bonds across the ratings spectrum have been low, supported by the strong balance sheets and robust profit growth.
Inflation The picture painted here is one of an economy that has been growing solidly, albeit at a rate below its potential. What are the implications of this picture for inflation prospects? Consumer prices excluding food and energy have accelerated over the past year, and this clearly is a concern.