Consumers are tired of inflation. But some retailers fear falling prices - eviltoast
Deflation could put pressure on retailers and brands to drive more volume, debut innovative products and find other ways to cover costs such as higher wages.

Key Points

  • As shoppers await price cuts, retailers like Home Depot say their prices have stabilized and some national consumer brands have paused price increases or announced more modest ones.
  • Yet some industry watchers predict deflation for food at home later this year.
  • Falling prices could bring new challenges for retailers, such as pressure to drive more volume or look for ways to cover fixed costs, such as higher employee wages.
  • thatKamGuy@sh.itjust.works
    1·
    8 months ago

    “Inflation is good” from the perspective of Government fiscal policy.

    Paying out interest on a AAA-rated loan (e.g. US bonds) is quite cheap, often below the national inflation rate. It allows (in theory) Governments to make large investments - like infrastructure - that work to increase their national GDP, which in turn can lead to increases in their tax-base, making it easier/cheaper to service their loans in the future.

    So if the US issues a $1b bond, payable at 10yrs - with inflation at ~3%, the “value” (purchasing power) of that money would have decreased by over 25%.