The Federal Reserve raised short-term interest rates this week by a quarter percentage point, bringing the central bank’s benchmark rate to a range of 4.50% and 4.75%. During Jerome Powell’s press conference on Wednesday, the Federal Reserve Chairman used terms like inflation, deflation and disinflation, but what do those terms actually mean for you and your money? Yahoo Finance’s Brian Sozzi, Brad Smith and Julie Hyman break down the three widely used terms .
For more coverage of the Federal Reserve’s interest rate decision, check out:
– Federal Reserve raises interest rates another 0.25% to highest since October 2007
– The word that made stocks fall in love with the Fed: Morning Brief
For more live financial news and analysis, make sure to tune into Yahoo Finance Live
Video Transcript
JULIE HYMAN: We heard from the Fed earlier in the week that disinflation was happening.
BRIAN SOZZI: Do you see disinflation?
JARED BLIKRE: Prices are not stable.
JULIE HYMAN: There’s inflation, there’s deflation, and there’s disinflation, right? Inflation is when prices are going up.
– Workers are still trying to keep up.
– Clothing, housing, gasoline cost.
JULIE HYMAN: Deflation is when prices are going down.
– We’ve seen the deflation in the pipeline.
JULIE HYMAN: Disinflation is when prices are going up at a slower pace.
– We’re now seeing some disinflation.
BRIAN SOZZI: Disinflation decoded. It’s used to describe the slowing pace of inflationary pressure. It is not deflation.