Inflation will likely be the highest its stood at in the US since 1993

Strong economic rebound and lingering pandemic disruptions fuel inflation forecasts above 2% through 2023, survey finds

US households should be prepared for several years of higher inflation than the country has seen in several decades, The Wall Street Journal reported, quoting economists. 

The measures required to recover the economy from the COVID-19 pandemic are likely to lead to increases in the costs of many everyday items. 

Economists surveyed by WSJ suggested that inflation would go higher and last for longer than appeared likely twelve months earlier. 

The average annual increase will be around 2.58 percent from 2021 through 2023, putting inflation at levels last seen in 1993.

“We’re in a transitional phase right now,” Joel Naroff, chief economist at Naroff Economics LLC told WSJ. “We are transitioning to a higher period of inflation and interest rates than we’ve had over the last 20 years.”

US consumers will need to adapt to a new financial environment, different to the last two decades where inflation was close to or even below 2 percent, and may face new generational challenges, Naroff said. 

Some experts are urging the Fed to intervene sooner rather than later.

“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,” Kevin Swift, chief economist at the American Chemistry Council, said.