Inflation in the United States: when will prices stop rising in 2023 according to experts?
Inflation has fallen in the United States from last year’s highs, but when will prices stop rising in 2023? This is what experts say about the situation.
Last year, the inflation rate reached historic levels in the United States. In June 2022, the year-on-year rate was 9.1%, the highest in the last 40 years. After its peak, inflation began to fall. According to the latest summary of the Consumer Price Index, in March, year-on-year inflation was 4.98%. However, the prices of some items are still high. When will they finally come down?
Inflation in the United States: when will prices stop rising in 2023 according to experts?
In general terms, experts agree that inflation is heading to a more manageable level at some point in the relatively near future, so prices could start to fall.
“We expect inflation to remain above the Fed’s 2% target rate through 2023 and hope that Fed action will ultimately succeed in slowing the economy and lowering inflation rates, especially in the second half of the year,” said Ben Johnson, chief operating officer at Kapitus (via GOBankingRates).
According to Arthur Coyne, a senior research analyst at Arnerich Massena, multiple factors “support a disinflationary bias” that will put the economy on a path to lower inflation for the remainder of 2023.
Fed continues to raise interest rates
However, predicting these changes is difficult. The Federal Reserve continues with its plan to slow inflation to a 2% target. On May 3, the central bank announced another 25 basis point increase in the interest rate to 5.25%, the highest level in 16 years.
“We remain firmly committed to bringing inflation down to our 2% target. Price stability is the responsibility of the Federal Reserve. Without price stability, the economy doesn’t work for anyone. In particular, without price stability, we will not achieve a sustained period of sound labor market conditions.” said Jerome Powell, Chair of the Fed.
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“My colleagues and I understand the hardship that high inflation is causing, inflation, and we remain strongly committed to bringing inflation back down to our 2% goal,” added Powell.