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2021-12-13 Economy
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Inflation Will Moderate in 2022. Unexpectedly!
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Originally observed in the Dallas Morning News. It's all supply-chain issues and staffing issues. That's all!
[Ay Pee] Inflation is painfully high, but this hopefully is close to as bad as it gets.
I wish I could be 'full of hope'
 Consumer prices rose 6.8% for the 12 months ending in November, a 39-year high. Many economists expect inflation to remain near this level a few more months but to then moderate through 2022 for a variety of reasons. And they don't see a repeat of the 1970s or early 1980s, when inflation ran above 10% for frighteningly long stretches.
Plenty of time until a new regime takes over!
Households could even see relief in some areas within weeks. Prices have dropped on global markets for crude oil and natural gas, which is filtering into lower prices at the pump and for home heating. That should keep inflation somewhat in check, even if prices keep rising elsewhere in the economy.
"This is not going to be an easy fix," said Nela Richardson, chief economist at ADP. "Just because inflation will eventually moderate doesn’t mean that prices are going to go down. They’re up. We’re just lowering the rate of change, not the level of prices."
One reason for the moderation, he said, is improving supply chains. They had become ensnarled when the global economy suddenly returned to life following its brief shutdown, and economists hope increasing availability of everything from computer chips to shipping containers will help inflation to ease.
That'll put more stuff on the shelves, not more money in pockets to purchase stuff.
"It’s in no one’s interests to have the supply chain as disruptive as it has been," Price said.
Then there's the Federal Reserve. Wall Street expects the Fed to say this upcoming week that it will accelerate its exit from a monthly bond-buying program meant to support the economy. That would open the door for it to begin raising short-term interest rates.
How long has the Fed been 'supporting the economy", I wonder?
The U.S. government will also potentially offer less aid to households in 2022, whether that's through child tax credit payments or beefed-up unemployment benefits. That could also lead to fewer purchases by Americans, further lessening the pressure on inflation.
Potentially. 
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Posted by Bobby 2021-12-13 11:26||
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