Top Line

Despite growing concerns over an impending slowdown, a growing number of experts believe that upcoming relaxations and easing of supply chain disruptions could help the inflation rate cool off more quickly than expected, potentially leading to inflation. It could offer a much-needed relief to cash-strapped Americans and investors. Implications of increasingly tightening in monetary policy.

Key Facts

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Although rising gas prices could push up overall inflation this year, core inflation, which has peaked except for volatile food and energy prices, “will fall sharply as markets and the Federal Reserve expect,” Pantheon Macro said. economists wrote in Wednesday’s note.

With a stronger dollar adding to inventories to make imports cheaper and ease supply shortfalls, The Economist projects inflation, which unexpectedly hit a 41-year high of 8.6% in May, by early next year at 4.9 percent. % will fall. Inflation dips from 6% to 3.7% — enough for Fed officials to cushion the interest rate hikes that are stirring up the markets.

Retailers facing over-spending consumers are “sitting on mountains of inventory” and on the verge of an aggressive wave of discounts next month after piling up on merchandise due to increased demand during the pandemic, analysts at Vital Knowledge Media Adam Crisfuli notes.

Among those cutting prices for items ranging from apparel and furniture to TVs and appliances are big-ticket retailers such as Walmart, Costco and Target, which last month announced plans to roll out an upcoming event to help manage inventory costs after a disappointing earnings crunch. Discounted.

“The underlying forces of inflation may shift in a more favorable direction,” says Crisafuli, adding that a “significant turnaround” is possible in the coming weeks, and citing a “significant decline” in prices of commodities such as wheat, corn, copper and iron. Having said. ore

There’s positive news for gas prices, too: Wholesale prices have fallen from about $4 to about $3.75 per gallon in recent weeks, meaning that retail gas prices—closer to $5 per gallon—are expected to rise over the next few weeks. Ready to fall “fast enough”. , according to the Pantheon, although it is unclear how long the relief may last.