Everyone is confused about the economy. Here’s what analysts have to say

There appears to be some confusion about the trajectory of prices in the US. That’s partially because month-over-month inflation eased in July while year-over-year, it remained near historic highs.

That raises an important question for consumers and investors alike: Is inflation peaking or not?
The answer, according to the market analysts, is probably. But there’s still a long way to go before we are where we want to be.

First of all, we need to remember that the ‘I’ in CPI and PPI stands for index. That means that shrinking inflation could come from prices falling in some sectors but not others. And that’s exactly what’s happening. Energy prices have dropped significantly over the last two months, dragging the top-line inflation numbers down along with them. But the costs of food, shelter and nearly every other commodity are increasing.

That’s worrisome because it means that “sticky” inflation is here. Shelter, healthcare and education prices all remained elevated, and those sectors tend to adjust their prices more slowly — so once they increase, they tend to stay high.

“We believe the worst of energy and supply chain inflation is behind us. However, the persistence of sticky categories will likely help keep inflation in the 5.5% to 6% range by the end of the year, mirroring trends across the globe,” said Scott Ruesterholz, a portfolio manager at Insight Investment, which has $1 trillion in assets under management.

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