Inflation Expected to Decline to 2% Target Rate in 2022 as Pandemic and War Impacts Fade
-
Inflation rate should decline to around 2% by end of 2022 as impact of pandemic stimulus and war in Ukraine fades. Shelter costs are main driver currently.
-
Core inflation rate excluding food and energy already near 2% target. Just needs to incorporate new lower lease rates.
-
Market overreacted to September CPI report, focusing too much on slight uptick in headline number versus downward trend.
-
Rate hikes take time to impact economy so shouldn't raise rates again based just on backward looking data.
-
Supply increase from new housing units being built will help keep rent prices in check going forward.
![](https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1551007220/image_1551007220.jpg?io=getty-c-w1536)