Virus Crisis Augurs an Inflation Breakout, Morgan Stanley Says

The coronavirus crisis is likely to bring an end to a 30-year run of disinflationary forces and herald the return of accelerating inflationary pressure that’s likely to overshoot central bank targets, Morgan Stanley said.

“For the first time in a decade, we are finally getting coordinated monetary and fiscal easing -- a policy dynamic that we have viewed as essential to get out of the low-growth, low-inflation loop,” Chetan Ahya, chief economist and global head of economics at Morgan Stanley, wrote in a research report. “The scale of easing is also unprecedented during peace time.”