Inflation’s path and expectations in the U.S.

Inflation continues to be a predominant concern for market participants and the Fed. Inflation peaked at 9.1% in June and has since eased off while remaining high for recent times. Prices excluding fuel and food climbed the most since 1982. 

Economists expect broad inflation pressures to ease in the year ahead, as global supply chains have improved, and this should allow a broad range of goods and materials prices to stabilize over time. While the pathway to ‘normal inflation’ will likely be bumpy, receding supply pressures and stable expectations should allow inflation to ease over the next few years.

Impact for you: New mortgage payments will be higher due to current interest rates (existing fixed-rate mortgages remain unaffected). Expect an individual’s annual rent to increase more than usual. Adjusting the thermostat in your home or reducing car travel will pay off more than usual this year.

This chart shows inflation’s path over the last 20 years, illustrating the current heights in context of previous highs and lows.