London Daily

Focus on the big picture.
Monday, Jul 20, 2026

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

0:00
0:00
Close
Charlie Sheen’s Daughter: "My Dad Didn’t Buy Me a House, My Breasts Bought It"
Vivienne Westwood Casts Cicciolina, 74, in Its New Autumn Campaign
Dejavu: Germany’s Military Expansion Reshapes Europe’s Strategic Balance With France
Jingye Demands Full Compensation After Britain illegally Nationalized British Steel
London’s Housing Starts Collapse as Planning and Building Costs Stall Development
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Trump Draws Boos and Podium Scrutiny at Spain’s World Cup Triumph
Brilliant move: Péter Magyar Moves to Nominate Chess Grandmaster Judit Polgár as Hungary’s President
Spain Defeats Argentina in Extra Time to Win Second World Cup
Police Block Cockroach Janta Party’s March to Parliament as Education Protests Intensify
Current AI Seeks to Build an Open Global AI Infrastructure Outside Big Tech Control
Turkey Explores S-400 Transfer to UAE in Bid to Rejoin F-35 Program
Josh Kerr Breaks Twenty-Seven-Year World Mile Record at London Diamond League
Thames Water Crisis Deepens as South East Water Outages Hit Thousands in Kent
EU Ban on Destroying Unsold Clothing Forces British Fashion Brands to Change Operations
UK Government Confirms Existing North Sea Oil and Gas Licences Will Be Honoured
UK Covid Inquiry Finds Nearly Ten Billion Pounds Lost in Pandemic Protective Equipment Procurement
Thames Water Moves Toward Possible Temporary Nationalisation Amid Rescue Plan Dispute
Andy Burnham Cancels One Point Eight Billion Pound Digital ID Programme After Taking Office
UK Government Takes British Steel Into Full Public Ownership to Protect Jobs and Supply Chains
Andy Burnham Becomes UK Prime Minister and Pledges Focus on Living Costs and Public Services
Germany’s Economic Malaise Reopens the Sunday Shopping Debate
Singapore Considers Lower Taxes for Fund Managers as Hong Kong Intensifies Talent Contest
US Retaliates Against Iran After Two American Troops Killed in Jordan
Bank of Asia BVI Enters Court-Supervised Liquidation After Regulators Find It Insolvent
Proposed U.S.-Saudi Nuclear Pact Could Permit Limited Uranium Enrichment Under International Safeguards
Netherlands Declares Water Shortage Emergency After Drought Pushes Rivers to Historic Lows
Why Kentucky Fried Chicken Became KFC—and Why the False Explanations Persist
Iran Claims It Destroyed Bahrain’s Main Artificial Intelligence Center in Missile and Drone Strike
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
Brothers Andrew and Tristan Tate Who Turned "Toxic Masculinity" Into a Brand Arrested in Miami as Britain Seeks Their Extradition
Reported CIA Mission Helped Clear the UAE’s Path to Advanced US AI Chips
Artificial Intelligence Capital Fuels Markets While Governments and Regulators Face Mounting Strategic Tests
China’s Moonshot’s Kimi K3 Narrows the Gap With Anthropic Through Scale, Openness and Lower Cost
Gold and Cash Seizure Puts Indonesia’s Senior Anti-Corruption Prosecutor Under Investigation
The Ledger Will Not Trust on Faith
Bank of England Warns Climate Shocks Could Trigger Sudden Asset Repricing
UK Treasury Places Microsoft, Google, AWS and Oracle Under New Financial Resilience Rules
Scottish Government Faces Pressure Over Delays in Vulnerable Group Background Checks
Crown Prosecution Service Authorises Additional Charges Against Andrew and Tristan Tate
NHS Approves At-Home Cancer Treatments for Rare Blood Disorders
Bank of England Gains Oversight of Major Cloud Providers Supporting UK Financial System
UK Government Plans Major Overhaul of English Local Councils Through New Unitary Authorities
British Steel Nationalisation Dispute Escalates as Chinese Owner Jingye Seeks Compensation
Bank of England Signals Interest Rates Will Stay High as It Warns of Financial Risks From Climate and AI
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
Passenger Bound for Germany Refused to Sit Beside a Woman on a Plane — Then Slapped a Flight Attendant
Ukraine’s Leadership Rift Spills Into the Streets as Protesters Target Army Chief
Ukrainian Drone Barrage Kills Eight and Strikes Russian Logistics Network
×