“Disinflation.”

No fewer than a dozen times on Wednesday did Federal Reserve Chair Jerome Powell say the word “disinflation” during his latest press conference.

And Powell’s repeated discussion of this dynamic helped supercharge a stock market rally following the central bank’s decision on Wednesday to raise interest rates by another 0.25%.

When the closing bell rang on Wall Street, the tech-heavy Nasdaq was up 2%.

The key quote from Powell came about 20 minutes into his press conference, when, in response to a question from Reuters’ Howard Schneider, Powell said, in part: “We can now say, for the first time, that the disinflationary process has started. We can see that.”

Unlike inflation (prices going up) or deflation (prices going down) — both of which economists fear in large quantities — disinflation means prices rise at a slower pace. Headline CPI, for example, rose 6.5% over the prior year in December after having jumped as much as 9.1% over the prior year in July. This deceleration in the pace of price increases is disinflation.

Full article: The word that made stocks fall in love with the Fed: Morning Brief (yahoo.com)