EGF - Persistent Inflation And Unhappy Consumers

Summary

• Inflation may finally be coming down.
• But inflation coming down and returning to 2% are two different things.
• Consumers still expect high prices this year on many of the goods and services that dominate their spending.

By Allison Schrager

Inflation may finally be coming down. The newest inflation report suggests inflation may have peaked, but inflation coming down and returning to 2% are two different things. The Fed has been adamant that they will raise rates or keep them high until inflation falls to 2%. Though talk is cheap when unemployment is at 50-year lows. And there are reasons to think this fight won't be so easy. The chart from the NY Fed Survey of Consumer Expectations , shows consumers still expect high prices this year on many of the goods and services that dominate their spending. This suggests higher inflation may be more persistent than policymakers and many investors are hoping.

(Source: Federal Reserve Bank of New York )

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