No it is not going to deflate drastically. and here is why. New York State has experienced 17,671 deaths so far and neither the numbe of new cases nor the number of new daily deaths are dropping appreciably if at all. If the real fatality rate were 0.2% or roughly twice what the seasonal flu is that would mean 8.8 million people in New York would have been exposed and infected. That would be 45% of the states population and if that large a portion of the population were infected we should already be seeing new cases tailing off dramatically, especially in New York City where the bulk of the cases and deaths have been and hence number of presummably infected would be if the fatality rate really were 0.2%. Go do the math yourself if you don’t believe me. 3.4% might be too high for the world but I doubt it since it is currently 9.8% across Europe and higher in wester Europe than eastern.
When enough people in the United States have been tested the mortality rate will plummet. If you want to play with numbers, look at Mariposa County in California with zero infections and zero deaths. At any rate of testing, the rate is zero per. Or you can look at those states which have less than a thousand deaths. When enough people are tested, the mortality rate is going to diminish to minimal numbers.