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While inflation has been easing, Americans are still feeling its lingering effects at the grocery store.

Americans have lived under the grip of inflation since the COVID-19 pandemic hit the world in 2020 — and for many people, it's still a confusing time.

As part of a series looking at how Americans are dealing with inflation, NPR asked listeners and readers to share some of the main questions they still have about inflation.

Many answered, wondering about aspects of inflation that still don't make sense to them, like whether corporations are engaging in profit-taking or whether election years impact inflation.

Here's a compilation of the top six questions asked — along with their answers.

Are companies just using inflation as an excuse to increase their profits?

It's complicated. Companies have faced the same higher costs like the rest of us — and many of them have passed on those costs to consumers.

At the same time, some companies have also been able to use higher inflation as an opportunity to raise prices beyond what simple cost increases would explain. That's not a surprise. Companies exist to maximize profits, and they'll usually charge what they feel the market can bear.

"Corporate executives can take advantage of inflation," says Rakeen Mabud, chief economist at Groundwork Collaborative. "They can take advantage of things like supply chain issues to jack up prices above and beyond what their input costs would justify."

But there's some good news. Those "input costs" — or the costs related to producing something — are easing, which means companies no longer need to increase their prices as much.

At the same time, consumers are pushing back against aggressive pricing strategies, so companies are starting to back down. McDonald's, for example, brought back a $5 value meal following its first sales decline since the pandemic began.

How do high interest rates slow inflation?

High interest rates help combat inflation by raising the cost of borrowing money, which can then slow economic activity — and therefore consumer spending.

For example, somebody who has to pay more for a car loan or for their mortgage may have less to spend elsewhere.

And to combat inflation, the Federal Reserve has raised interest rates to their highest in over two decades.

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Those higher rates have helped bring down inflation, which eased to an annual pace of 2.9% last month.

It's not just high interest rates helping to ease inflation. A big reason that inflation spiked during the pandemic was companies were not well prepared to meet the surge in demand for everything from iPhones to laptops from consumers stuck at home.

But companies have since responded to the shortages of goods seen during the pandemic by investing in supply chains.

"When we get new technology, better processes, better equipment, that can help reduce the cost of producing various goods and services, and that can be passed on to the consumer," says Sarah House, a senior economist at Wells Fargo.

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Why is there a 2% target inflation rate — shouldn't it be 0%?

Setting a target inflation rate is seen as helping to ensure more stability in prices by giving a clear objective for the central bank.

New Zealand was the first country to set 2% as a target rate, in 1989, and most central banks followed suit, including the Fed, which made the target explicit in 2012.

While a 0% inflation rate may sound ideal in theory, economic growth requires some form of inflation.

Setting the target at 0% also raises the risk that the Fed could overshoot its objective, putting inflation at a negative rate, or deflation.

That's when prices fall, which may sound like a good thing, but it can be economically very harmful. Widespread price cuts are typically a symptom of economic distress.

How have election seasons impacted inflation?

In short, not by much.

Plus, economists note, each election year is different, so comparing them is rarely an apples-to-apples comparison.

The Fed has also usually fiercely guarded its independence in setting monetary policy — regardless of whether there's an election taking place.

Sometimes, though, an election can slow spending by both corporations and consumers, which can help ease inflation.

"Businesses and people are very unsure about who's going to win and what the future holds, so they decide to sort of pull back a little bit — you know, maybe not make that big expenditure, maybe not hire that new employee or make that investment until they know," says Julia Coronado, president of MacroPolicy Perspectives.

Why is it taking so long for inflation to ease?

This is where regular people and economists might see things differently.

"Inflation is coming down really fast by economist standards, and I know that's not the average person's standards," Coronado says.

Many people still feel they are paying more at the supermarket or at restaurants than they used to — and they are not incorrect.

Inflation during the pandemic rose more than many Americans had grown used to in years prior, and all the cumulative price increases continue to hit people's wallets.

But annual inflation is easing, from an over four-decade high of 9.1% in June 2022 to 2.9% in July of this year.

But that only means prices are no longer increasing as much. It doesn't mean that prices are falling, which is deflation. And as noted, that is not usually a good thing for the economy.

Is the only solution to inflation to go through a recession?

Thankfully, no — but a recession can occur.

The difficulty with monetary policy is that the impact of interest rate changes doesn't have an immediate effect: There's usually a delay in how they filter through the economy.

That makes deciding how much to raise interest rates — as well as how long to keep them high — a difficult exercise.

Economists had worried last year that the economy would be headed for a recession. Instead, the economy grew strongly.

But recent weaker-than-expected data on employment has raised concern that the Fed has kept interest rates too high and that the economy could be slowing sharply.

There are no guarantees that a recession is coming — most economists still don't expect one.

And while the Fed has kept interest rates steady since July 2023, many expect it to cut rates next month, by either a quarter percentage point or even more.

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