Deflation
Definition · Level 7 · Futures, rates & macro
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A sustained fall in the general price level (negative CPI y/y). It makes consumers delay purchases and raises the real burden of debt; Japan fought it for years. Not the same as disinflation, which is merely slower price growth.
Example
CPI −0.4% y/y qualifies; CPI slowing from 5% to 3% is disinflation.
Where Tradecraft teaches it
Level 7 · Futures, rates & macro, in the lesson “Macro data & market reaction”: The key US releases, what hot and cool prints mean, and why good news can hurt stocks.
Related terms
- Core CPIConsumer price index excluding food and energy: the monthly BLS inflation measure traders watch most, reported m/m and y/y.
- GDPGross domestic product: the total value of goods and services an economy produces.
- Good news is bad newsMarket regime where strong economic data hurts stocks because it implies higher rates for longer: higher yields and discount rates outweigh the…
- Hot printA data release stronger or more inflationary than consensus (the median forecast).
- InflationA sustained rise in the general price level, eroding the purchasing power of money and of fixed coupons.
- Initial jobless claimsWeekly count of new filings for unemployment insurance, usually released Thursdays at 8:30 ET: the most timely read on layoffs.