Falling Inflation Offers Leeway for Stimulus

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By Trey Thoelcke Published
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Data released today by the Organization for Economic Cooperation and Development (OECD) showed that the annual rate of inflation across developed economies fell for the fifth straight month in July. Consumer prices in the 34 OECD member countries rose by 1.9% in the year that ended in July. That was less than the 2.0% rise in the 12 months to June, and the lowest level since November 2010.

The decline in inflation rates across that many leading economies provides central banks more leeway to cut key interest rates or supply other forms of stimulus to counter the global economic slowdown. U.S. Federal Reserve Chairman Ben Bernanke last week signaled that he is considering another further quantitative easing, or QE3.

Among OECD members, the annual rate of inflation was highest in Turkey. Prices there rose by 9.1%. But prices in Switzerland were 0.7% lower than in July 2011 and down by 0.4% in Japan over the same period.

Among large developing economies, the inflation rate ticked up sharply in Russia, but also in Brazil and Indonesia. Consumer prices fell most sharply in South Africa, and in China and India to a lesser degree.

An earlier report showed that U.S. consumer prices were flat in July for a second-straight month, and the year-over-year increase was the smallest in more a year and a half, despite inflation fears due to the Midwest drought.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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