The most stunning forecast in the Congressional Budget Office’s The Budget and Economic Outlook: 2022-2023 is that rapid inflation is almost over. What the agency calls personal consumption expenditures (PCE) will rise 4.0% this year and 2.3% next year. From 2024 to 2026, the figure will rise only 2.0%.
[in-text-ad]
Oddly, gross domestic product growth, one signal inflation has not disappeared, will rise 3.1% this year. That will dip to 2.2% in 2023, a substantial deceleration. Unemployment, another factor often coupled with inflation, will continue to fall to a steady 3.5%. The labor force will continue to grow.
The CBO is not the only organization that believes inflation will fall off soon. However, the Federal Reserve fears otherwise. The central bank will raise rates by 0.5% at least two more times. A consensus is growing that this will tip the economy into recession.
Forecasters cannot eat their cake and have it too. Rising rates may tame inflation but will damage the economy. High inflation will undermine consumer and business spending. Either way, the economy is riding for a fall.
Sponsored: Want to Retire Early? Here’s a Great First Step
Want retirement to come a few years earlier than you’d planned? Orare you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
