Despite attempts by the US Federal Reserve to control inflation, this has not been achieved, at least not in the short term. What awaits the United States in 2023?
At the end of 2021, Americans were hopeful that inflation would reverse when 2022 arrived, however, at least 10 months have passed and this has not happened. What is the prediction now that the end of 2022 and the arrival of 2023 are approaching? In Globe Live Media we are going to tell you a little about the panorama.
The latest figures provided by the United States Bureau of Labor Statistics (BLS) are overwhelming: year-on-year inflation in August was 8.3%, in July it was 8.5% and in June it was 9.1%.
So far, the country’s Federal Reserve (Fed) has made three attempts to stabilize inflation by raising interest rates at the federal level, but so far it has not given great results. On the contrary, thanks to these movements, the country is inching closer to an economic recession, more and more analysts argue.
One of the reasons why inflation has risen so much in 2022 has to do with the stimulus checks that were approved by the federal government to help Americans combat the crisis caused by the Covid-19 pandemic.
These checks were received at a time when the supply chain was already severely hit precisely by the problems caused by the coronavirus pandemic. This created an excess demand for goods. So when demand exceeds supply, prices automatically rise.
For prices to fall, either supply must catch up with demand or demand must weaken. That is why the Fed is taking these measures to be able to stabilize supply and demand and will continue to try until it is achieved, if necessary, more times in the remainder of 2022.
Although economists support the Fed’s plan and think that at some point it will take effect, it will not be immediately. In this case, inflation levels should not be expected to drop by the beginning of 2023. Although some improvement may be seen in the remainder of 2022.
Indeed, earlier in 2022, the nonpartisan Congressional Budget Office said that while it expects high inflation to persist through 2023, inflation should decline next year.
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