However – and there is frequently a “however” in our business – further declines in oil prices suggest that total inflation will likely remain low for somewhat longer than had been previously expected before moving back to 2 percent. In addition, global financial markets have been unusually volatile since the turn of the year.
For instance, the S&P 500 volatility index (VIX) rose markedly in early January, though it remains below the levels it reached in August of last year and in 2011, and it last week declined below its average value since the start of the year.