The Congressional Budget Office (CBO) is expecting inflation to remain elevated in 2022 and then to subsequently decrease over the next couple of years, the agency said on May 25.
The Personal Consumption Expenditures (PCE) Price Index, which is the Federal Reserve’s preferred measure of inflation, will be 4 percent in 2022, the agency projected in its recently published Budget and Economic Outlook report (pdf).
Although this is a decline from the 5.5 percent inflation of 2021, it still remains elevated and is double the Fed’s goal of 2 percent inflation. The PCE Price Index in 2020 was 1.2 percent.
The core PCE Price Index, which excludes volatile items like energy and food prices, is expected to grow by 3.8 percent in 2022, down from 4.6 percent in 2021, and up from 1.4 percent in 2020….