Economists project U.S. consumer price inflation to accelerate sharply, reaching an annualized 6% rate over the next two quarters from April to June, according to the latest Survey of Professional Forecasters from the Philadelphia Fed.
Survey Highlights Sharper-Than-Expected Rise
This forecast significantly exceeds the prior estimate of 2.7%. Core CPI, which strips out volatile food and energy prices, now stands at 3.2% for the period, surpassing the previous projection of 2.8%.
Forecasters anticipate inflation to remain above 3% through the third quarter before easing to 2.5% in the fourth quarter.
Recent Price Pressures Intensify
April data underscores the upward trend, with headline CPI climbing to 3.8%—its highest level in three years—and producer price inflation (PPI) hitting 6%, the peak since 2022. Consumer and producer price indices reached their highest mid-year marks on record.
Fed Officials Weigh Persistent Risks
Federal Reserve Chair Jerome Powell attributes the recent surge to goods prices, which show signs of moderation. He maintains that a widespread wage-price spiral remains unlikely despite ongoing pressures.
Analysts observe that Fed policymakers increasingly view additional interest rate hikes as essential to lock in inflation expectations. They highlight challenges in restraining wage growth amid elevated price dynamics.
