Deflation risk seems to be making a comeback… again. Germany yesterday sold five-year government notes at a negative yield for the first time in its history. Meanwhile, China’s central bank this week warned that the threat of deflation is rising for the world’s second-largest economy. Europe and Japan, of course, continue to struggle with lowflation/deflation. The US is doing better, thanks largely to stronger growth, but inflation is low and may get lower still. “The problem is that aggregate prices are dipping in so many places at once,” The Economist reminds.
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● Yellen: Economic Future Doesn’t Pivot on Full Employment | MNI
● U.S. new home sales steady near multi-year highs | Reuters
● German consumer confidence at 13-year high despite crises | WaPo
● German Unemployment Rate Remains At Record Low | RTT
● US Mortgage Apps Continue Falling Despite Low Interest Rates | HousingWire
● Germany Sells Five-Year Debt at Negative Yield | NY Times