Inflation in the U.S. is currently 2.7%, still higher than the Federal Reserve’s 2% goal. Prices are also much higher than before the pandemic—on average, things cost about 24% more than they did in early 2020. While inflation has dropped a lot since its 2022 peak, it’s not improving as quickly now because tariffs and higher import taxes are pushing up costs. Many businesses are passing these higher costs to shoppers, which is why prices for everyday items like coffee, eggs, beef, and even used cars are still rising. Core inflation, which leaves out food and energy, is at 3.1%, showing that the underlying price problem hasn’t gone away.
Economists expect inflation to stay elevated for a few more years, especially if tariffs remain high. This has made the Fed cautious about cutting interest rates further, which means borrowing money (for cars, credit cards, or homes) will stay expensive. For consumers, the big picture is that prices will likely keep rising slowly, and money doesn’t go as far as it used to. Even though inflation is much better than in 2022, it’s still a problem that affects shopping, saving, and planning for the future.
Source : https://www.bankrate.com/banking/federal-reserve/latest-inflation-statistics/
4 comments:
It's interesting how tariffs are now one of the key reasons inflation isn't falling faster, especially since they directly raise the cost of everyday goods. Even though 2.7% looks better compared to 2022, the fact that prices are still 24% higher than before the pandemic shows why so many people feel squeezed. It seems like the challenge now isn't just lowering inflation, but also figuring out how households can adapt to this new normal of higher costs.
If the cost of borrowing money stays high, will there also be a decrease in people attending college? Currently, colleges are struggling to enroll students, as the generation of kids now entering college were all born during the Great Recession. Is this a product of the Great Recession and its effects 18 years later on the economy?
With the inflation staying at 2.7% it will be interesting to see what Trump will be doing over the coming months to try and bring that down to the federal reserve goal of 2%. With trump wanting the inflation to drop, while still implementing tariffs it will be interesting to see whether he draws back on them or keeps with them.
I do believe that it will take time for inflation to reach the Fed's goal of 2%. Since the pandemic we have also seen three different types of administrations come through office. We have another three years of high tariffs but I am curious if they will continue to stay this high throughout Trump's entire presidency. Over the past three years of being in college I have noticed that things are more expensive than they were when I was a freshman.
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