Disinflation
Definition · Level 8 · Rates, FX & macro
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Inflation that is slowing: prices still rise, but at a lower rate. Not the same as deflation, where prices actually fall.
Example
Inflation slowing from 5% to 3% a year is disinflation.
Where Tradecraft teaches it
Level 8 · Rates, FX & macro, in the lesson “Macro data: how markets react”: The reaction map, why good news can hurt stocks, and the words for inflation and growth regimes.
Related terms
- DeflationA sustained fall in the general price level (consumer prices lower than a year ago).
- 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…
- InflationA sustained rise in the general price level, eroding the purchasing power of money and of fixed coupons.
- Reaction mapThe typical first reaction when inflation is the focus: a hot print lifts the 2-year yield and the dollar and often lowers stocks and gold; a cool…
- StagflationStagnant or shrinking growth and rising unemployment combined with high inflation — the worst mix for a central bank, since fighting prices deepens…
- Technical recessionRule of thumb: two consecutive quarters of negative real growth in gross domestic product (GDP).