High energy prices are burdening household budgets and raising production costs, and continued increases would at some point restrain economic growth.
Deflation can be particularly dangerous when a financial system is shaky, with household and corporate balance sheets in poor shape and banks undercapitalized and heavily burdened with bad loans.
Smart financial planning - such as budgeting, saving for emergencies, and preparing for retirement - can help households enjoy better lives while weathering financial shocks. Financial education can play a key role in getting to these outcomes.