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
- Strictly Come Dancing announces four tours for 2021 and 2022
- RAM raises 2021 inflation forecast to 3%
- Economists forecast faster 2021 inflation
- Mercedes faces "tricky" decision over 2021 vs 2022 split
- Travel firm launches £1 deposits for bucket-list-worthy holidays in 2021 and 2022
- ADB projects Uzbekistan's economy to grow 4 pct in 2021, 5 pct in 2022
- Why Europe should not worry about inflation
- Why Europe should not worry about COVID-fueled inflation
- BSP seen keeping rates steady in 2021
- IMF ups India's growth forecast to impressive 12.5% in 2021
After a shocker in 2021, where might inflation go in 2022? have 263 words, post on www.economist.com at December 18, 2021. This is cached page on Drudgereport. If you want remove this page, please contact us.