Aging Populations Could Steadily Lower Inflation Like Japan's, Eurizon Strategists Predict
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Eurizon strategists forecast US inflation to steadily fall to the Fed's 2% target, citing Japan's aging population trends lowering inflation over time.
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Since the 1990s, Japan's aging population has caused inflation and interest rates there to drop, despite attempts by the Bank of Japan to stimulate demand.
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Historical data shows more countries face disinflation as populations age - China may face "Japanification", following Japan, South Korea, and Italy.
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Japan's labor force peaked in 2019, 1.7 times its 1950 size, suggesting 0.77% annual growth, but policies extended the peak by nearly 20 years.
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As more countries follow Japan's demographic path, inflation should follow a similar long-term downward trajectory globally.