Inflation is already at its highest point, but it is still going to be higher than it was before Covid. David Mann from the Mastercard Economics Institute says this will continue in the next two years, and by 2023 it will be above the levels it was before Covid.
Inflation is at a lower rate than it was before the pandemic, but it will still be higher than what we were used to before the pandemic.
It’ll take a few years to return to 2019 levels, he said.
We expect to start moving back down the interest rate path we were on in 2019, where we were still debating how many countries needed negative interest rates.
Central banks have been raising interest rates in recent months in order to fight high inflation.
The G10 group of central banks includes the Federal Reserve, the Bank of England, and the Reserve Bank of Australia. They’re joined by other central banks from countries that are growing quickly, like Indonesia, Thailand, Malaysia, and the Philippines.
The Federal Reserve will hold its December policy meeting this week, where it is expected to increase interest rates by 50 basis points. The central bank has increased rates by 375 basis points so far this year.
Inflation is a big challenge because it’s been going up a lot, and it might keep going up. But if the central banks raise their rates too much, that could be risky.
The challenge is if you can’t find your way around, you might not know where you need to go.
If the central banks go too far, they might need to back away from their policies quickly.
Despite high inflation, Americans still have money to spend on things like travel.
The U.S. travel recovery is strong, and people are still spending money on experiences, rather than things.
The family is trying to be careful with their spending so that they can afford things that are not necessary.
The scientist said that some people worry that Covid restrictions may come back, even though it’s not very likely.