Prices Still High But Rising More Slowly; Risks If They Actually Fall

Prices are still painfully higher than 3 years ago (e.g. soda up 35%, eggs up 43%, used cars up 16%)

Prices are rising more slowly now (disinflation), but public wants actual price drops (deflation)

Deflation can damage economy by discouraging consumer spending and triggering job losses

Main historical example is Great Depression when prices fell 25% alongside 33% drop in economic output

Risk is that falling asset prices hurt banks, which then cut off credit and cause a recession