Disinflation

Disinflation is a milder version of deflation, which is commonly used by the Federal Reserve to describe a period of slowing inflation. It occurs when the increase in the “consumer price level” slows down from the previous period when the prices were rising. It is used to describe periods of slowing inflation, disinflation should not be confused with deflation, which can be harmful to the economy. Deflation is represented as a negative growth rate, such as -1%, while disinflation is shown as a change in the inflation rate from 3% one year to 2% the next.