(Reuters) – Goldman Sachs (NYSE 🙂 predicts that the U.S. core personal consumption expenses (PCE) index will nearly halve before 2022. This is because the U.S. Bank expects a rise in commodity prices, and supply-chain restrictions to ease.

Goldman Sachs economists predict that the core PCE index, the Federal Reserve’s favorite inflation measure, will fall to 2.3% next year from 4.4% by the end of 2021. This is because demand should decrease as the stimulus and peak stay-at home effects fade.

Although current inflation has been described as “startling”, experts attribute the increase to durable goods prices. This is due to persistent supply and demand imbalances.

Jan Hatzius, Goldman’s chief economic economist, stated in a note that the current inflation surge would get worse before getting better.

We expect inflationary pressure to continue from higher wages and rents growth, but not enough to maintain inflation above 2% as the Fed has set out in its new framework.

After a 0.3% increase in August, the PCE index, which excludes volatile food and energy, rose 0.2% in September. The so-called core PCE index grew 3.6% in the twelve months to September.