Vanguard Chief Investment Officer Tim Buckley has sounded a warning on deflation as a real risk for the global economy, reports Tim McLaughlin for Reuters.
Buckley points out that falling prices could curb growth in developed economies that rely on consumption to fuel gross domestic product since consumers would hold off on purchases to buy something later at a lower price.
“Once you’re in the cycle, it very difficult to get out,” Vanguard Chairman William McNabb said in the Reuters article.
Meanwhile, the Federal Reserve is expected to hike rates this year, which would put further pressure on prices.
For more information on the markets, visit our current affairs category.
Max Chen contributed to this article.