T HE ONLY thing that proved transitory about inflation in America in 2021 was the consensus that it would subside. The left-hand chart shows that analysts consistently revised up their predictions, trailing reality. Consumer prices are now rising by nearly 7% compared with a year earlier, the fastest pace since 1982. What does the future hold? The right-hand chart presents two scenarios. In the first, month-on-month inflation immediately falls back to its pre-pandemic trajectory. Even so, it would take until the end of 2022 for annual inflation to slow to the 2% pace that used to be the norm. In the second case, consumer prices rise at the same monthly clip seen over the past year. Annual inflation would soar to nearly 8% in February, and stay elevated. Either way, one prediction seems rock-solid: the Federal Reserve will start raising interest rates in 2022, as the central bank itself indicated on December 15th. For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks , our weekly newsletter. This article appeared in the Finance & economics section of the print edition under the headline “After a shocker in 2021, where might inflation go… Read full this story
- Amtrak will start using high-speed trains in 2021
- Everything you need to know about Amtrak’s high-speed trains arriving in 2021
- Vivo becomes official sponsor of the 2018 and 2022 FIFA World Cup
- The NFL is in line for another huge payday as networks gear up to bid on Thursday night football games
- Meralco nears $1.7-B financial closing for 1,200MW plant
- SNAP to study Alimit Hydro project
- Royal Caribbean in $2.8-B 3-ship deal with STX
- MVP wants early preparation for 2023
- Duterte could end jeepney phaseout debate
- A Las Vegas hotel mogul plans to send an inflatable space hotel into orbit around the moon by 2022
After a shocker in 2021, where might inflation go in 2022? have 289 words, post on www.economist.com at December 18, 2021. This is cached page on The World Articles. If you want remove this page, please contact us.