The truth is that if money does not circulate, no matter how much the monetary base is increased deflation is ensured.
U.S. consumer prices dropped in May for a third month as the coronavirus recession continued to depress demand.
The consumer price index fell 0.1% from the prior month after a 0.8% drop in April that was the largest since 2008, Labor Department figures showed Wednesday. The gauge increased 0.1% from a year earlier following a 0.3% gain in the year through April.
The third month of falling prices could spur concern about the risk of deflation as the U.S. economy begins recovering from the Covid-19 recession.