Prices on federal funds futures and Eurodollar futures suggest that market participants expect the FOMC to cut the target federal funds rate about 50 basis points during 2007, a view consistent with expectations of a "soft landing."
Money must be trusted by the public to be a constant yardstick of value, otherwise it will not be acceptable as a means of exchange, and cannot continue to serve as a store of value. The many disadvantages of inflation are well-known. High inflation distorts the allocation of resources and favours investment in non-productive hedge assets.