INFLATION has been plaguing prices for months with no end in sight.
With Americans paying more money in almost every sector, many are wondering when it will end.
The short answer, nobody really knows.
While inflation is common and typically a sign of a burgeoning economy, it is lasting longer than expected and is starting to seriously impact pockets.
In June, the consumer price index (CPI) rose to 9.1%, with accommodation, petrol and groceries being the main contributors to the price increase.
Housing costs rose 5.6% last year and food prices rose 10.4%.
According to CNBC, June could be the hottest month for consumer inflation and warns that will depend on energy prices – which is difficult to predict.
Some experts say inflation will cool once demand slows, supply chain bottlenecks are eased and is largely dependent on the ongoing war in Ukraine.
In addition, the Federal Reserve has continued to raise interest rates in hopes of cooling demand and slowing the economy.
Alan Blinder, a Princeton professor of economics and public affairs and a former Fed vice chairman, recently wrote in an op-ed for The Wall Street Journal that inflation will not last much longer.
“One day, hopefully soon, food and energy prices will level out and supply chain issues will resolve,” Binder said.
He added that inflation will fall just as quickly and theatrically as it has grown.
Morningstar experts agree, forecasting higher inflation for the remainder of the year, but this will fall in the coming years as prices have already peaked in most sectors.
What is inflation?
Inflation can be described as more money chasing fewer products.
Higher inflation also means your money is worth less because it costs more to buy goods and services.
Many factors are responsible for the increase: the pandemic, labor shortages, wage increases, rising commodity costs, government spending and Russia’s invasion of Ukraine.
It’s starting to outpace the rate of wage growth and is affecting the cost-of-living adjustment for Social Security — worrying many Americans.
However, experts claim that this is a temporary value, meaning that it is temporary and expected to decrease in the coming year.
Grocery prices are skyrocketing by up to 35% while inflation hits a new 40-year high – see how much more you’re paying for each item.
Also, thousands of families can claim up to $6,000 in direct payments thanks to new childcare tax credits.
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