- The US economy could soon be at risk of deflation, according to Wermuth Asset Management.
- Wobbling commercial property values a correction of lofty stock valuations would drag prices lower.
- Inflation accelerated 3.3% on an annual basis in July, well-below the pace of inflation recorded last year.
Disinflation could soo turn to deflation in the US, partly due to the risk of crashing stocks and real estate prices, according to Wermuth Asset Management.
Already, commercial property values are under pressure, while a potentially overvalued stock market could face a swift correction if conditions sour. A plunge in the price of these assets would go a long way in sparking deflation, the firm argues.
“To speculate about deflation again at this point looks premature at first glance,