I'm not saying the Fed did the right thing. I'm just sick of reading people saying deflation is fine because that means prices are falling and that's a good thing and should be expected in a productive society. That's the correct view in 1890 when the railroads are burgeoning and US households have low debt load. In this case, deflation means rising real interest rates. Deflation of 5% means it feels like your mortgage is now at 10%. That massively increases defaults...which drives the banks to tighten lending to 0...which increases real rates...It's vicious spiral. That spiral is the principal fear. The falling prices trend is a tiny and minor little nothing of a concern. The rising real rates is the issue. The Fed is trying to lower real long term rates. That's it. End of story. Japan is not analogous because household debt is nothing. The govt is in debt to its own citizens. The US is in the opposite situation. Deflation would essentially be the proverbial nail in the coffin here. I think the way they are doing it is going to be a big problem at some point, and this is not sustainable (cart leading the horse). But the point is not a fear of lower prices. It is a fear of rising real rates.