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EconoMeterists' biggest 2013 surprise

Stocks, inflation rate, unemployment among unexpected trends

Roger Showley, U-T SAN DIEGO

Friday, December 27, 2013

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Kelly Cunningham, National University System

Answer: Lower inflation With the Fed maintaining zero interest rates and injecting some $1 trillion in bond buying through so-called "quantitative easing" over the year, I expected inflation to rise instead of decline. The stock market hit new highs, yet the U.S. economy bumped along at a lackluster pace. This disconnect was achieved through the Fed’s massive gambit of monetary stimulation. Falling gas and energy prices offset otherwise increasing prices for food and other goods. While we have less control, to some extent, over energy prices, core consumer prices are more closely related to the capacities of domestic demand and overall economy recovering.