[GalenErso]

The Fed can't lower rates if only because it needs to maintain its credibility. The financial press has been cranking out opinion pieces disguised as serious analysis nonstop in an attempt to wish a change of monetary policy into being. If the Fed backs down anytime soon, it could decrease the effectiveness of future increases. The next time the Fed raises rates, consumers, asset holders and businesses can just tell themselves that this increase will be brief and the Fed will soon lower rates. The Fed is engaged in a game of psychological brinkmanship with asset holders and businesses who think they can ride this out. Only when the latter capitulate - by selling houses for lower prices for example - can the Fed begin to consider lowering rates. The Fed needs to hammer home the message that you can't fight the Fed.

[euix]

Also unless the inflation rate goes negative, the actual price of goods is not going down, it's just increasing slower because you had a whole years worth of high inflation. If YoY inflation goes down that just means last year's inflation was already so high, relative to this year we are "only" increasing by 3% or 4%, etc.

In that sense the inflation is now baked in, and we only make future increases slower but we don't unwind back to the original price without some serious deflation.

[UncleMeat]

Monthly inflation in December was -0.1%.