Beautiful Virgin Islands

Wednesday, Jul 30, 2025

Inflation sticking around in 2022

Inflation sticking around in 2022

American consumers are grappling with the fastest price increase in decades, with the cost of everything from cars to gasoline to food soaring nationwide.

And the problem may get worse before it starts to improve.

In a recent analyst note to clients, Goldman Sachs economists warned that pandemic-induced disruptions in the global supply chain – which have caused congestion in ports and warehouses nationwide – could last longer than expected as surging demand struggles to keep up, meaning that inflation metrics will remain "quite high for much of next year."

"It is now clear that this process will take longer than initially expected, and the inflation overshoot will likely get worse before it gets better," they wrote.

Inflation, as measured by the Federal Reserve's preferred gauge, has climbed to the highest level since February 1982. In November, the personal consumption expenditures price index jumped to 5.7%, well above the Fed's preferred target of 2%. The data is further evidence of a spike in prices illustrated by a separate measure – the Consumer Price Index – which showed inflation rose by 6.8% in November from the previous year.

Customers wait in line to check out during a Black Friday sale at Macy's, Nov. 26, 2021, in Indianapolis.


The hotter-than-expected inflation report will likely reinforce the Federal Reserve's decision in December to accelerate the withdrawal of its monetary support for the U.S. economy and could create additional pressure on the central bank to further tighten policy in 2022 by hiking interest rates.

Although policymakers voted to hold rates near zero, where they have sat since March 2020, new economic projections show that every Fed official has penciled in at least one rate hike next year – a considerable shift from September, when half of the central bankers believed interest rate increases were not warranted until at least 2023.

Officials now project rates to stand at 0.9% at the end of 2022, 1.6% at the end of 2023 and 2.1% at the end of 2024.

At the conclusion of its most recent policy-setting meeting, the Federal Open Market Committee said that it would double the reduction of its asset-purchase program to $30 billion a month, a timeline that could phase out the purchases entirely by March rather than the original June trajectory laid out last month.

Jerome Powell, chairman of the U.S. Federal Reserve, during a Senate Banking, Housing and Urban Affairs Committee hearing in Washington, D.C.


Fed Chairman Jerome Powell said that he still believes consumer prices will fall next year as bottlenecks at supply chains clear up, but he also warned of a growing risk of persistently high prices. The decision to speed up its withdrawal of support, Powell said, stems from a spate of October indicators, including rising wages, half a million new jobs and a 0.9% monthly increase in consumer prices.

"There’s a real risk now," Powell said at a press conference to explain the Fed's decision. "I believe that inflation may be more persistent…the risk of higher inflation becoming entrenched has increased."

The Goldman Sachs economists – who projected that core PCE inflation will rise from 3.6% to 4.4% by the end of 2021 – seconded that opinion. They have forecast that inflation will cool slightly to 2.3% at the end of 2022 and fall to 2.1% by the end of 2023.

"We do not think that aggregate demand is on an unsustainable trajectory or that inflation expectations have become unanchored, and the overshoot should therefore ultimately prove transitory," the economists wrote.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
×