We have posted on the inflation topic before. Previously we noted how its a guessing game as to whether we will continue to have deflationary pressures or in the slightly longer term, inflation. My guess is that when the economy recovers, we will see inflation. Then again, I am more of a regional econ science guy rather than a macroeconomist so we look to the Fed for guidance because outside of individual decision makers in the aggregate, the Fed has the most influence.

James Bullard, President of the St Louis Fed, recently gave comments to the Financial Times about inflation, noting that, "I think there’s still some risk of deflation, but I do think the deflation risk is fading as the economy recovers.” He goes on to express, "In the medium term, “you have inflation that will be possibly substantially above target over a horizon of two to four years, and that, I think, is because of the combination of very large fiscal deficits in the US with very easy monetary policy.”