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You're getting supply and demand confused with inflation.

Inflation is a rise in the general price of goods. One item changing price (like a Taylor swift concert ticket) isn't inflation, especially peak pricing.

Explaining it is much more than a commet length, but ill try before my phone dies.

As gdp increase (better efficiency, more good sold, new markets, value add services) more people are employed to do this work. Unemployment falls when this exceeds the growth of a population from either new people entering the workforce or immigration and against retirement and death. Okuns law.

As Unemployment falls, inflation increases. Less people employers are fighting over means perks and wages increase, driving inflation and costs of production. Phillips curve relationship.

Effectively, economic growth results in inflation.

If I had more time, changing the OCR affects components of GDP, changing inflation through these methods. But there is alot that goes into the logic.

Blood for the blood god!

The debate is whether to cut the FFR yet.

I'm against it. But people are rightfully worried about deflation. Its a terrifying situation from an economic point of view.

But you're right. There's very little sign of deflation (yet). We can hold rates higher, and maybe even go another +.25% up. Inflation is at a safe level right now, not too high and not too low, but we need to stay on guard to make sure it stays in this golden zone, and move as appropriate.

There were too many new jobs (too little unemployment) again in January. So we might still have rates too low IMO.

Prices drop, causing more people to get fired. IE: The Great Depression. Or if you want a modern economy that's undergoing this shift, just look at China right now.

If people can't afford things, your only choice is to fire workers and drop prices further. That's just economics. (Why do you need workers? No one is buying anything, so fire your workers. Duh). The more people realize that this is the only strategy to survive, the lower prices get, the more people get fired, and the less that people can consume. It gets worse and worse until economists change policy and pull you out of this.

This is why we have large pseudo-government central banks keeping watch over our economy. Deflation cannot be tolerated. Yes, inflation sucks, but at least people still have jobs and livelyhoods in times of inflation or hyperinflation even. That's actually survivable. Deflation is NOT survivable, it sucks so much worse. Deflation is all-hands-on-deck we need to work together kind of situation. We never want to push the economy to that direction.

China isn't doomed btw. China's plan is to exports goods to Europe and hope that Europe buys enough Chinese crap that they can kickstart demand again. And as prices drop further and further, Chinese goods will get cheaper, and crap like Temu will pop up to sell these cheaper goods to everyone. Now there's geopolitical repercussions to this (not everyone will want to support such "dumping" of goods into our countries), so there's no guarantee that China will be successful on this front.