| After a historic run-up in inflation, Americans are now starting to see something they haven’t in three years: deflation. Prices for long-lasting items, known as durable goods, have fallen on a year-over-year basis for five straight months. In October, they were down 2.6% from their peak in September 2022. The downward trend has helped bring down core inflation – the Fed and market’s preferred gauge for pricing trends. |
| Weaker demand and improved supply chains are likely contributing to falling prices in certain corners of the economy. The data, however, is compelling for a Federal Reserve that’s been on a mission to tame inflation. Businesses, having enjoyed strong price increases, will have to adjust to price cuts as we embark on a new chapter in changing price dynamics. |
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