Inflation Is Running High—Here's What Experts Expect for the Rest of the Year

Core Insights - Economists anticipate inflation to rise in the fourth quarter due to the impact of President Trump's tariffs on consumer prices [2][8] - The Consumer Price Index (CPI) is projected to increase by 3% year-over-year in the fourth quarter, up from 2.9% in August, marking the highest level since May 2024 [3][8] - Inflation, as measured by Personal Consumption Expenditures (PCE), is expected to reach 3.2% in December, a rise from 2.9% in August, with a forecasted decline starting in 2026 [4][9] Inflation Trends - The CPI is expected to accelerate in the fourth quarter as companies begin to pass on tariff-related costs to consumers [3][8] - The PCE index rose by 2.7% year-over-year in August, indicating a slight increase from 2.6% in July, while core PCE remained stable at 2.9% [4] - A significant portion of tariff costs, estimated at 70%, is being passed on to consumers, with expectations of further increases in the coming months [6][7] Consumer Impact - Rising inflation is affecting household budgets, particularly for essential goods like gas and groceries, with wage increases not being evenly distributed among Americans [5] - Companies have been hesitant to raise prices due to potential loss of business, but surveys indicate a shift towards passing on costs to consumers [6][7]