Accordingly, I want to turn to a further exploration of the causes of deflation, its economic effects, and the policy instruments that can be deployed against it. Bringing concepts to life. The Congress has given the Fed the responsibility of preserving price stability among other objectiveswhich most definitely implies avoiding deflation as well as inflation. Return to top Speeches. A healthy, well capitalized banking system and smoothly functioning xnxx hot aunty girls markets are an important line of defense against deflationary shocks.