This is the new baseline, you won't see inflation lower than this long-term until the system completely collapses under its own weight. The only thing keeping things running is cheap money and there will need to be more of it. Any "solution" that looks like austerity will result in destabilizing unrest. In the USA, Republicans will campaign on inflation but make money as cheap as ever as soon as they have control, because it's the only way to keep things afloat.
I think this situation is trash, but deflation is much, much worse than inflation. We don't need to revisit 1929, upper middle class will just have to live with dilution of assets if they want a functioning society.