U.S. economists expect higher inflation rates to last several years

U.S. economists expect higher inflation rates to last several years
AP Photo/Evan Vucci
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A new report highlights concerns from top economists about potential higher inflation rates lasting several years, amid excessive spending by the Biden administration.

“Americans should brace themselves for several years of higher inflation than they’ve seen in decades, according to economists who expect the robust post-pandemic economic recovery to fuel brisk price increases for a while,” the Wall Street Journal reported

“The respondents on average now expect a widely followed measure of inflation, which excludes volatile food and energy components, to be up 3.2% in the fourth quarter of 2021 from a year before. They forecast the annual rise to recede to slightly less than 2.3% a year in 2022 and 2023. That would mean an average annual increase of 2.58% from 2021 through 2023, putting inflation at levels last seen in 1993.”

The report noted that inflation measures were at levels not seen since the early 1990s, and the Biden administration may not raise rates until after the midterms to avoid fallout from the administration’s policies. 

Comments from the economists surveyed by the paper included:

  • Joel Naroff, chief economist at Naroff Economics LLC: “We’re in a transitional phase right now. We are transitioning to a higher period of inflation and interest rates than we’ve had over the last 20 years.”
  • Diane Swonk, chief economist at Grant Thornton: “Inflation is expected to surge longer and longer—longer than the Fed previously thought. The Fed is now likely to raise rates in the first half of 2023, although some Fed presidents will be nipping at the bit to move sooner.”
  • Kevin Swift, chief economist at the American Chemistry Council: “The danger is that monetary authorities are behind the curve. I’m not saying hyperinflation is around the corner, just that a lot of things have come together in the last year, and the overall trend of costs across the board is growing faster than in the last five or 10 years.”
  • Swift also noted the havoc that inflation is having on the construction industry, saying: “It’s disruptive—you can’t be sure of what your costs are, whether you can get supplies or what the costs will be six months from now. I’d hate to be in the construction business trying to bid on a job when you don’t know what the cost of steel will be 18 months from now.”

The Biden administration was recently blasted over social media following a Twitter post from the White House bragging about Americans saving $0.16 on the cost of the total amount of food they would consume on the Fourth of July, claiming that the savings were proof of Biden’s economic plan working. 

The Daily Wire reported:

The claim that saving Americans a total of $0.16 on a very narrow list of items is proof that “the Biden economic plan is working” is laughable. Inflation is skyrocketing, the economy has a record-high quit rate, millions of Americans could soon face evictions, and Biden has suffered numerous disastrous job report numbers. Gas prices are higher now than they were at any point under former President Donald Trump and are the highest they’ve been since 2014. AAA said this week that they expect “crude oil prices to likely continue climbing following the holiday and through the end of summer.” Top Democrat economists have warned that the economy is at serious risk of overheating and of inflation becoming much worse. Eighty-five percent of Americans are now worried about inflation. Top investors have also warned the Biden administration “just continues to pour more gasoline on [the housing market] fire,” which they said is “making inequality worse” because “you end up subsidizing the rich at the expense of the poor.”

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  • By Ezra Levant

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