WASHINGTON: US annual inflation will remain above the 2 percent target of the Federal Reserve for the next three years amid rising wages and strong demand for goods and services, according to a survey released by the National Association for Business Economics (NABE).
“Eighty-seven percent of the panelists cited supply chain barriers, 76 percent identified the demand of goods and strong repairs, and 69 percent of the wage increase list as the main driver of higher prices,” Xinhua news agency quoted a survey published on Monday saying.
Business economists have increased their inflation expectations for 2021 and 2022 compared to the last survey in September.
The overall consumer price index (CPI) was projected to rise 6 percent in the fourth quarter of 2021 from the previous year, compared to an estimated 5.1 percent in the September survey.
CPI inflation is expected to continue to increase by the end of 2022 in 2.8 percent year-on-year, compared to the September 2.4 percent estimate.
The core price index of personal consumption (PCE), the size of the Fed’s favored inflation, is now expected to increase by 4.1 percent in the fourth quarter of 2021 from the previous year, and only slow to year to year 2.6 percent.
In the fourth quarter of 2022.
About 71 percent of respondents anticipate that the core PCE Gauge will not decrease to or below the Fed 2 percent target until the second half of 2023 or newer, the survey was revealed further.
Meanwhile, 58 percent of respondents anticipate that the US economy will have achieved or will achieve full work at the end of 2022.
On the basis of the annual average, the Nabe panel expects the real GDP of the country to increase by 5.5 percent in 2021 before slowing down to growth rates 3.9 percent in 2022.
Last month, the Fed began to reduce the monthly asset purchase program of $ 120 billion of $ 15 billion.
At this speed, the Fed will end the purchase of assets in June next year.