If there is one factor that drives the inflation-deflation cycle, it is the effect and trend of interest rates. The bond/note market is the foundation of the stock market, and makes its existence possible. Interest rates compete with all other forms of investment for capital. When rates are rising, the stock market is less attractive because government bond and note yields are guaranteed, while stock market dividends and profits are not. Falling interest rates, which may stimulate inflation, precipitated the largest stock market increase in history. Real interest rate yield equals the inflation rate subtracted from interest rate yields. A 5% bond yield and 7% inflation rate erodes the purchasing power of money annually by two times. Notes and bonds are not really controllable by the FED. The market pretty much decides what those will be. There is a great fallacy perpetrated by the FED which makes people think the FED controls interest rates. The truth is they don't. All the FED ever does is to react to what is happening in the market. When the yield curve gets too far out of alignment, the Fed raises or lowers interest rates. However, there's more. The FED does control the money supply. The FED prints money with no accountability. They create money out of thin air. With the removal of the M3 statistic, the lack of control is even more prominently displayed. The FED is almost entirely responsible for long-term inflation. If you or I were to print money with no accountability, we would be put in prison for counterfeiting. Yet the FED continues to print counterfeit money to the extent that people on fixed incomes suffer tremendously from the falling dollar.