Second, nowhere did the statement refer specifically to deflation (that is, to a decline in the general price level); rather, the reference was, again, to a “substantial fall in inflation.” In the present circumstances, a disinflation (a decline in the rate of inflation) and a deflation (a falling price level) are not necessarily the same thing.
Inflation could decline somewhat from present levels and still remain positive, although it is true that the lower the inflation rate goes, the greater is the risk of actual deflation at some future time. This distinction between inflation that is positive yet too low and deflation is worth exploring for a moment.