"I hope by the end of next year," Biden told reporters on Tuesday when asked about when he expected prices would return to normal, clarifying that it was only his hope and not a prediction.
"I’m convinced they’re not going to go up," he added.
Biden’s comments come after the US Bureau of Labor Statistics published its consumer price index report for November, showing that prices had risen by 7.1% since a year prior. While still high, it’s still the smallest such increase since December 2021 - a sign that the Federal Reserve’s efforts to quash inflation are working.
For the year, inflation of the US dollar is expected to average at 7.3%.
Biden called the report welcome news and “news that provides reason for some optimism for the holiday season and I would argue for the year ahead.”
“Make no mistake, prices are still too high. We have a lot more work to do,” he added.
Indeed, prices for common holiday season purchases have gone up considerably since last December, with the highest increases seen in airline fares, gasoline, baking goods, and “energy services,” according to BLS data.
The central bank is expected to meet later this week and issue yet another interest rate increase, as it has every month since March, despite the slowing of inflation. Fed Chair Jerome Powell recently signaled the rate hike might not be so drastic this month, but that the bank’s final target rate could be considerably higher than previously expected, at over 5%.
By doing so, the Fed hopes to slow down investment, and thus also the flow of money and its depreciation in value. However, some economists have pointed out that the majority of inflation over the last two years has been driven by corporate profiteering, not increases in shipping or manufacturing costs or workers’ wages.
However, a persistent fear of economists is that increasing interest rates will also increase unemployment or even drive the economy into a recession. For months, experts have predicted a global slowdown in the economy in 2023, not sparing the United States, and Wall Street investors have been behaving “really, really bearish,” as one outlet put it. In other words, even though the US is not in recession, forward-looking investors are behaving as if it is.