Inflation has cooled substantially🎐 from its post-pandemic highs but has remained stubborn. Economist♉s expect the trend of sticky inflation to continue this year.

According to the Federal Reserve's preferred measure, inflation has moderated considerably since peaking at a 7.25% annual rate in June 2022. However, progress this year has slowed, and inflation remains above the Fed's annual goal of 2%. In the 12 months ending in N▨ovember, inflationও rose for the second consecutive month.

The Fed recently scaled back its expectations for interest rate cuts in 2025 owing to persistent inflationary pressure.

Inflation Likely to Stay Near Current Level

Wells Fargo economists projected the inflation rate would be between 2.5% and 2.6% over the next year. That’s higher than the 2.4% reading in the 12 months ending in November and further from the Fed's goal.

Federal Reserve officials agree. In their most recent projections, the median estimate for inflation in 2025 was 2.5%.

Investors are also preparing for higher prices, with BMO Chief Economist Scott Anderson writing that bond markets have already priced in inflation of around 2.4% over the next five years.

What Factors Continue to Push Inflation?

Ec🍷onomists generally look at three main elements of inflation: goods, services, a🐈nd housing. 

Goods

For consumers, prices for physical goo🐓ds mostly stayed steady or declined in 2024, while the costs of both services and housing remained elevated.

However, Wells Fargo senior economist Sarah House 𒈔said the progress made on goods may be stalling, projecting that inflation at the e♏nd of 2025 would only be moderately better than levels this year-end.

One reason is that 澳洲幸运5官方开奖结果体彩网:proposals for new tariffs fr🐭om President-elect Donald Trump 😼could drive up prices. 

“It looks like we're already set to see less goods deflation next year,” House said. “When you layer on the prospect of tariffs, we do think that you're likely to see at least a modest pickup in inflation the back half of (2025).” 

Services

Economists forecast that consumers will likely still face elevated prices in the services sector in the new year as well. However, Nationa💃l Retail Foundation President and CEO Matthew Shay said they may have already adjusted their spending habits accordingly. 

“They’ve certainly adjusted their behavior throughout the course of this year to reallocate their monthly disposable 🌳income because there are pockets of stubborn inflation on the services side,” Shay said.

Housing

Economists have 澳洲幸运5官方开奖结果体彩网:long expected housing inflation to fall. The government data that's used to measure housing inflation lags behind other measures. Economists, including Fed Chair Je🌌rome✅ Powell, expect government data will be more in line with rents currently being offered.

"With housing services inflation—which is one that we've really worried about—it really has come down now quite steadily, at a slower pace than we thought two years ago," Powell said at a press conference following the Fed's December policy meeting. "That process is ongoing."