Selter, food, and energy prices are all rising, squeezing household budgets.
Inflation has likely peaked, but it will come down slowly. The Fed wants to see clear evidence that inflation is moving back to its 2% target before easing policy.
Economists expect inflation to stay high until the end of 2025. High interest rates and yields, along with geopolitical risks, could make things worse, potentially leading to higher oil and gasoline prices.
Markets expect the Fed to pause rate hikes for the rest of 2022, but rates will need to stay high through 2023 to get inflation under control.