Japan's case is instructive here. Once people stop believing prices will climb in the medium and long term, flipping that mindset becomes brutally hard. A Peking University economics scholar put it bluntly: that psychological anchor gets locked in. And once it does, deflation expectations become self-reinforcing—households cut spending, demand drops, prices fall further, and the whole cycle perpetuates. It's not just economic theory; it's behavioral economics playing out in real time. The takeaway for markets? Inflation and deflation aren't purely about monetary policy—they're about what people expect, and those expectations shape everything that follows.