Public Unrest Over High Prices Poses Challenge for Biden's Re-election

Economists caution against the allure of deflation, citing potential economic downturns.

Many Americans are frustrated by high prices, with essential items like soda, eggs, and used cars seeing significant increases over the past three years.
Despite some prices starting to rise more slowly, a phenomenon known as disinflation, public discontent remains a potential issue for President Joe Biden's re-election campaign.
Economists warn that while falling prices, or deflation, might seem appealing, they could have detrimental effects on the economy by discouraging consumer spending and triggering layoffs.
Deflation has not been seen in the United States since the Great Depression, but Japan has recently emerged from decades of falling prices that began in the early 1990s.
Some researchers argue that the economic threat of deflation is overstated, but acknowledge the severe impact of asset price collapses on the economy.