The inflation rate of Federal Reserve “dollars” has fallen to nine percent as of January, 2014, down from 14 percent in June of 2012. This is good news since inflation creates new “dollars” by taking the value from all existing dollars. See charts below.
This could also mean the stock market will soon fall since banks has reduced the rate at which they are creating and lending money. Note the peaks and valleys of the charts and how they might follow the booms and busts of the stock market. About a year before the 2008 recession, the inflation rate bottomed out at two percent.
Inflation means an increase in the number of existing dollars. Inflation does not mean a price increase, though prices often rise because of inflation because the “dollar” loses value.