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Consumer Price Index: Difference between revisions
→7. Lower demand
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=== 7. Lower demand === | === 7. Lower demand === | ||
The slowing in demand the economy has started to experience will help put downside pressure on prices. The pricing power companies experienced during 2022 will diminish as demand declines, especially on discretionary items. | |||
* Spending is expected to continue slowing as excess savings decline, debt cost increases (more income will go towards debt service), and banks start to tighten lending conditions<ref>https://fred.stlouisfed.org/series/DRTSCLCC</ref>. | |||
* In terms of the possibility of a recession, historically, inflation has come down on average 6.8% in a recession since 1923. | |||
== Long term inflation drivers == | == Long term inflation drivers == | ||
== References: == | == References: == | ||