Americans have watched prices spike during the pandemic. By the end of 2021, one inflation measure was near a four-decade high while another hit two records in a row.
We know the causes: worker and product shortages have resulted in pandemic-era price hikes for such goods such as used cars, as well as strong consumer demand.Now, the Federal Reserve has come down from the mountain to rein inflation in. In October, the central bank announced a tapering of its pandemic stimulus. It has since accelerated the pace of that and forecasts multiple interest rate hikes this year.As the stimulus winds down, supply chain constraints are slowly improving.
These higher salaries, particularly for lower paying jobs, won't go away in 2022.Energy and food costs are also pushing higher. Food prices soared last year, and rising fertilizer prices and bad weather promise to keep those costs high.And while energy costs eased in December amid the Omicron surge and took some of the heat out of the monthly inflation numbers, economists think this could reverse in 2022.
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