Stubbornly low U.S. inflation readings over the past decade have confounded economists from Wall Street to the Federal Reserve.
Explanations have ranged from the trillions of dollars of freshly printed money pumped into the global financial system after the 2008 financial crisis to short-term price wars that sometimes occur in isolated marketplaces and should ostensibly soon dissipate.
But on Wednesday, a Fed top official floated a novel theory: Maybe it's the internet.
Rob Kaplan, president of the Federal Reserve Bank of Dallas, said that the internet may bring consumers so much transparency -- on the cost of flights, sweaters, mutual funds or even a bocce-ball set -- that businesses have to perpetually match or even discount prices to win sales.
"It may be that business pricing pressure has been fundamentally reduced as a result of technology," Kaplan told a conference at the regional central bank's headquarters in Dallas.
Consumer prices have risen over the past decade, on average, by about 1.5% per year, below the Fed's target of 2%. Officials at the central bank said that a small amount of inflation is healthy for the economy because it prevents a vicious cycle of price deflation.
The unusually low inflation rate is especially confusing given the current economic scenario: President Donald Trump's late-2017 tax cuts have stimulated U.S. economic growth and pushed the nation's unemployment rate to a half-century low of 3.6%.
Typically that brew would produce fast inflation, since businesses would theoretically have to pay higher wages to attract workers and then raise prices to recoup the extra labor costs.
But that's not happening, and there's little prospect of that happening in the near term.
James Bullard, president of the Federal Reserve Bank of St. Louis, said separately on Wednesday in a speech in Hong Kong that U.S. inflation is again likely to undershoot the Fed's 2% target in 2019 "following seven years of inflation mostly below target."
"My baseline case here is leaning toward another low-side miss," Bullard said.
Such a scenario would be good for consumers, of course, because their dollars go further. But it also means the Fed may be able to keep benchmark U.S. interest rates in their current, historically low range between 2.25% and 2.5% -- allowing businesses and households alike to enjoy low payments on loans and credit cards.
Federal Reserve Chair Jerome Powell told reporters at a press conference earlier this month that technology might be advancing so rapidly that workers have become more productive, allowing each employee to generate more value per hour for their employers, in turn leaving them room to increase wages and still keep profits up -- without raising the end prices charged to consumers.
"It's driven to some extent by technological developments and really the diffusion of technology through the economy," Powell said.