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Good news first: Inflation is steadily cooling, and the Federal Reserve appears to be winning its ongoing fight against rising prices.
While inflation isn’t quite yet where the Fed would like to see it — around 2% — recent readings show it’s getting close. And a recent projection from the Congressional Budget Office found that inflation could cool to 2.1% in 2024.
These reports are undeniably good news, but some experts say it’s too soon to declare victory.
“The more benign inflation data is certainly something to celebrate, but there is some turbulence ahead,” Omair Sharif, founder and president of Inflation Insights, wrote in a note Friday.
As we head into the new year, it’s important to have realistic expectations. Broadly speaking, prices are expected to grow at a slower rate than they have been lately — a shift economists call disinflation. This is very different from deflation, a period where prices fall and consumer goods get noticeably cheaper.
Overall, prices will likely continue to moderate and, as wages rise, become less of a burden on people’s budgets in 2024. But that's not the case for every expense. Some goods and services, experts predict, will actually balloon in 2024.
