Are prices hitting the danger zone?
The Fed isn’t taking any chances Just a few months ago, Whirlpool Corp. WHR was being squeezed through the wringer of deflation. Despite the strong U.S. economy, fierce global competition had forced U.S. appliance makers to cut prices by 2% last year. But now, says Chief Financial Officer Ralph F. Hake, ”we’re seeing an abatement of the pricing pressures. This is an upbeat industry.” Whirlpool is a telling micro-indicator of what is happening in the U.S. economy. With signs of a turnaround in the global economy, the pressures that have driven down prices around the world are easing. For two years, economists and investors in the U.S. had scanned the horizon for signs of the inflation they feared must accompany low unemployment and rapid growth. Instead, they found that inflation had shrunk–to 1.6% in 1998–as the global meltdown slashed the cost of Asian imports, oil prices plunged, central bankers pushed down interest rates, and companies squeezed more productivity out of their ope
