OPINION:
Inflation statistics can support nearly any political argument. That’s why today’s debate over prices feels disconnected from economic fundamentals. Lost in the rhetoric is a basic distinction: Disinflation is healthy, but deflation is not. The idea that we can return to pre-2021 price levels is wishful thinking.
The myth of deflation as a policy goal
Recent campaigns featured explicit promises to “lower prices,” with the clear suggestion that a new administration could roll back the cost of groceries, fuel or rent to levels from years ago. This was a false promise. It is also not something we should hope for.
For nearly a century, economists have recognized that broad, sustained deflation can trigger a damaging cycle in which debts become harder to repay, defaults rise, spending slows and the downturn deepens. In the United States, true deflation outside major recessions is exceedingly rare. Apart from a brief episode in 1921 and 1922, there is no modern case of deflation simply unwinding a previous bout of inflation.
In practical terms, inflationary periods rarely reverse. Wages eventually rise to meet the new price level, and the economy adjusts. For today, that means the current price level has almost certainly become the new normal.
Understanding today’s inflation picture
Much of the commentary around inflation now centers on the administration’s performance. The underlying data tells a straightforward story.
From May through August, the core Personal Consumption Expenditures Index, one of the most reliable measures of underlying inflation, increased 2.8% to 2.9% year over year. That is modestly above the Federal Reserve’s 2% target but far below the 6.1% pace recorded in early 2022. It is also slightly below the average rate from 2024.
The honest conclusion is not dramatic. Inflation remains a little higher than ideal, but it’s stable and broadly similar to the environment that existed when the current administration entered office.
What government policy can and cannot do
On inflation, the fairest grade for the White House, as is often the case in economic matters, is “not applicable.”
Reducing inflation from roughly 3% to 2% would require policy actions whose effects are difficult to predict, and the most important tools for doing so lie not with elected officials but with the Federal Reserve. Even experts routinely misjudge the causes of inflation and the impact of potential remedies.
The past year has also underscored how limited federal influence can be over real economic conditions. In early 2025, tariffs and new immigration restrictions were widely described as inflationary. Many expected immediate price increases. Instead, businesses adapted to the new landscape, found alternative suppliers, shifted hiring practices and absorbed costs. In a large and diverse economy, policy changes often take years to fully register.
Looking ahead
The public conversation about inflation often lacks a clear economic perspective. It is important to keep several points in view. Deflation is neither likely nor desirable. Disinflation, the slowing of price growth, is already underway but difficult for the federal government to accelerate without unintended consequences.
Despite political claims, no administration has the ability to push the overall price level back to where it stood before the inflation surge of 2021 through 2023.
Prices are not going to fall broadly, and that outcome is not the responsibility of any single politician. A more productive discussion would focus on maintaining steady, predictable inflation rather than chasing the false promise of across-the-board price declines.
• John Frechette is the CEO of Sourced Economics and moara.io. He also teaches at George Washington University and Stevenson University.
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