Inflation is the change in prices. We ideally want a little bit of it to get money moving around the economy. With stimulus checks and low interest rates, there was too much money chasing too little goods, causing prices to rise and YoY inflation went up to 10%. Rising interest rates brought inflation back down to where it should be. But the prices themselves aren't going to go down. That would be deflation, which causes money to stop moving around in the economy.
Money has to move around the economy for it to be a good one. Every single dollar you earn, someone else spent. Every dollar you spend, someone else earns. Deflation gets people to stop spending, which means people stop earning, which means people stop spending (since they have to tighten budgets or don't have money), which means people stop earning, and soon enough the economy goes in the shitter.
We've had extended periods of deflation exactly two times since we've had the means to start tracking it. The first time was called The Great Depression. The second time was called The Great Recession.
> With stimulus checks and low interest rates, there was too much money chasing too little goods, causing prices to rise and YoY inflation went up to 10%.
At least half the run-up in inflation was on the supply-side of things:
Deflation is not bad and is in fact good for savers. Moreover, deflation encourages less consumption which is good for the planet. I see you've been brainwashed into thinking the government needs to steal 2% of your wealth every year lest the economy will blowup.
Money has to move around the economy for it to be a good one. Every single dollar you earn, someone else spent. Every dollar you spend, someone else earns. Deflation gets people to stop spending, which means people stop earning, which means people stop spending (since they have to tighten budgets or don't have money), which means people stop earning, and soon enough the economy goes in the shitter.
We've had extended periods of deflation exactly two times since we've had the means to start tracking it. The first time was called The Great Depression. The second time was called The Great Recession.