Inflation Is Down. The Hangover Remains.

What people feel now is the hangover from that inflation, not the doing of the administration that inherited it.

When the inflation rate falls from 9% to under 3%, it is easy to hear “prices are coming down.” They are not. A falling rate means prices are climbing more slowly — not reversing. The only thing that actually lowers the overall price level is deflation, and the Federal Reserve is built to prevent it: the target is 2% inflation, not zero. So the price level is designed to ratchet up and hold.

The chart below shows both truths in a single frame. The rate (bottom) spikes and then comes all the way home. The level (top) climbs, flattens, and simply never falls.