Inflation often triggers emotional reactions, including stress and frustration, particularly directed at governments and businesses perceived as responsible for rising prices. Since the 1990s, inflation in the United States has rarely exceeded 3%. In much of the Western world, economists grew more concerned about the risk of deflation -a persistent decline in prices, as seen in Japan in the early 2000s - than inflation.

However, the COVID-19 pandemic reignited inflation concerns in the U.S. The annual inflation rate reached 4.7% in 2021, surged to 8% in 2022 (the highest in 40 years), and settled at 4.1% in 2023.¹ This article will help you understand why people tend to dislike inflation, and which behavioral blind spots reinforce this reaction.

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