The US Goldman Sachs expected a significant decline in the country’s inflation rate in 2023, but will remain higher than the target of the federal reserve, at 2%.
The bank said in a note that the basic personal consumption index, which is the preferred scale of inflation for the federal reserve, may decline from 5. 1% levels recorded in September, to 2. 9% by the end of next year, expecting a sharp decline in basic inflation in 2023 due to three main factors.
Goldman Sachs identified those factors in the decline in supplies, low rental and shelter hypertrophy, and a sharp slowdown in wage growth, as these factors had pushed inflation to the highest level in forty years this year.
He pointed out that “from the perspective of the federal reserve for inflation, the great decline in inflation and the return towards the target are two completely different things, and despite the expected improvement, the basic inflation will remain the highest target of the federal reserve over each meeting of monetary policy next year.
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The market expectations indicate that the federal reserve will raise the interest by about 50 basis points in the meeting next month, and that it will continue to raise the interest next year until it reaches a level ranging between 4. 75% and 5% by mid 2023.
Source: cnbc.
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