Explainer: The Fed says disinflation is welcome. What is that, exactly?

Posted on AllSides February 2nd, 2023
From The Center
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ANALYSIS

Financial markets this week latched on to what U.S. Federal Reserve Chair Jerome Powell called "most welcome" disinflation, betting it signals the central bank's war on high inflation is nearing an end.

Powell in fact used the word 15 times during his 45-minute press conference Wednesday - an explosion of attention after just one mention in other press conferences going back to the start of Fed rate hikes last March.

But what, exactly, is disinflation, and why is it welcome?

INFLATION

To understand disinflation, it is helpful to first understand...

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