A Whiff Of Deflation

If inflation was transitory, after all, what's next? We are expecting a resumption of the low inflation environment that occurred for many years prior to the Great Virus Crisis. However, there is already a strong whiff of deflation in the air. If that's what happens next, then the source will be China's economy, which is weighed down by its deflating property bubble and by its rapidly aging population. Consider the following recent developments:

(1) Slippery oil prices. The Brent January contract tumbled $3.76, or 4.6%, to settle at $77.42 a barrel (chart). US WTI crude and the global benchmark hit their lowest price levels since early July.