MAR 13, 2018
There are a variety of hypotheses of exactly how inflation will exert its influence across the broader economy over the coming year, but a rising consensus indicates that it’s a matter of ‘to what extent’, not ‘if’.
Many other factors can move inflation one way or the other. For example, trade restrictions may mean higher prices for toys and shoes. Plenty of rain and good harvests can keep food prices manageable, while a drought can do the reverse.
Distribution efficiencies by online retailers like Amazon could hold prices down. A shortage of truck drivers could boost the cost of transportation. More people seeking work after having been out of the labor force will boost labor supply and hold wages from accelerating too fast.
Still, the five reasons stated above are too powerful to ignore, and hence inflation will be rising. An inflation rate of 3% by the end of the year is a distinct possibility.