20 December 2022 | Other

BlackRock predicts U.S. inflation above 2% in coming years

According to BlackRock strategists, traders’ hope for a sharp slowdown in inflation is futile.

In the strategists' view, the presence of weakening price pressures cannot be denied. However, they strongly disagree with the forecasts that say inflation will fall to the 2% target level set by the U.S. Federal Reserve (Fed). 

Scott Thiel, one of BlackRock's strategists, believes that due to several factors (labor shortages, higher wages and falling inventories), the inflation rate won’t fall to 3.5% until the end of next year. That’s quite different from the one-year consumer price index (CPI) at 2.38% and the 10-year breakeven at 2.14%.

Thiel noted that the target level was too low. In his view, the market should always be prepared for volatility in the CPI's numbers. He also added that reducing inflation from 7% to 5% would be easier than reducing from 5% to 3%.

BlackRock predicts that as early as the first half of next year, the Fed will raise rates to 5% in an attempt to prevent the inflation rate from fixing at 3%.

Company MarketCheese
Period: 14.05.2025 Expectation: 1650 pips
Technical and fundamental background supports AUDCAD
07 May 2025 80
Elena_Dorokhina
Elena_Dorokhina

Listed among the best MarketCheese authors
1st in the segment "Currencies"
Period: 08.05.2025 Expectation: 550 pips
EURUSD to drop to 1.13000
07 May 2025 56
Period: 13.05.2025 Expectation: 240 pips
Brent crude price rebound to continue up to 65
07 May 2025 71
Period: 14.05.2025 Expectation: 1000 pips
Buying GBPUSD amid trade talks and weaker dollar with target at 1.344
07 May 2025 36
Period: 12.05.2025 Expectation: 1500 pips
USDJPY rebound fades ahead of Fed meeting
06 May 2025 71
Period: 30.05.2025 Expectation: 975 pips
Natural gas maintains upside potential within megaphone pattern
06 May 2025 76
Go to forecasts