Meanwhile, there has been massive investments in financial instruments of all sorts, both in local and external markets, in what has been called “the search for yield”, which has created considerable spillover effects of UMP. The crux of the matter is that it seems that “financial risk-taking” has been by far more responsive to UMP than “real risk-taking”.
Turning to inflation, it continues to run below the FOMC’s longer-run objective of 2 percent. Overall consumer price inflation – as measured by the change in the price index for personal consumption expenditures – was only 1/4 percent over the 12 months ending in October.