Inflation is now effectively beaten. Not only has it cooled significantly, but now the specter of deflation has recently been raised, and has already been seen in the prices of durable goods falling a bit recently. Oil is also down as well, which has of course led to a recent drop in gasoline prices. And this is in spite of the ongoing conflict in the Middle East, which otherwise would have raised oil prices, ceteris paribus, due to the resulting geopolitical instability and uncertainty.
Deflation may sound like a good thing, especially after such a high inflationary episode, but if it persists, it can turn into a downward economic spiral that is far worse than inflation (think the Great Depression, or Japan's three decades of rolling deflation from the early 1990s until very recently). It also amplifies the sting of debt, and with debt of all kinds at such stratospheric levels today, America needs that like a hole in the head. Once such a spiral begins and sets in, it is very, very difficult to extricate from. Not even QE can seem to end it (though giving such "helicopter money" directly to We the People might work). And deflation is, at best, very difficult to control.
So the FERAL Reserve really needs to cut interest significantly, and pause QT, yesterday, before they create a problem that is practically impossible to dislodge. And if that doesn't work, prepare to not only restart QE, but also implement "QE for the people" as well. say you weren't warned.
UPDATE: Looks like the Fed decided to stop hiking interest rates, and signaled three interest rate cuts next year in 2024. So now is the best time to put your money in a CD account to lock in the current rates.
