[hayst4ck]

> Once you get enough layoffs and paycuts, eventually inflation will go down because people cant buy shit.

If people can't buy stuff why wouldn't you expect marginal cost to go up?

More people buying more stuff means economies of scale. Less people buying less stuff means the loss of economies of scale.

If people are less able to buy stuff, I don't see any reason to believe that prices would go down. If anything it seems like it creates an incredibly negative feedback loop.

A company might firesale their inventory resulting a temporary reduction of inflation, but it seems like production would decrease because demand decreased, which would result in more layoffs and stagnation.

I am not an economist, so I guess I am curious why stagflation is not the expected result.

[chii]

> I don't see any reason to believe that prices would go down.

and they won't. Lowering inflation is not the same as ensuring prices drop (it might happen, but it would be an unintended effect of the Fed's policies).

prices will remain high (compared to pre-covid) but be stable after inflation drops down. And i would imagine that the Fed's policies would change if they start seeing deflation (which is when prices drop).