Has inflation peaked? What experts say consumers can expect in the next few months

David Lightman and Hanh Truong
The Sacramento Bee (TNS)
Guy Benhamou pumps gas at an Exxon Mobil gas station on June 9, 2022, in Houston.  (Brandon Bell/Getty Images/TNS)

SACRAMENTO, Calif. — Here’s what experts say is the future of prices, which have been increasing at levels unseen in nearly 41 years:

Get used to them. The good news is that costs are likely to stop increasing at such a torrid pace throughout the next few months. Some already are, but not all.

The average price of a gallon of regular gasoline in California has fallen 51 cents over the last month. Housing prices in the state are stabilizing. While food prices are increasing fast, some are dropping. Certain travel costs are down, although whether that continues is unclear.

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Overall, analysts do not see the mix of factors that in June sent prices, as measured by the government’s Consumer Price Index, soaring at an annual rate of 9.1%.

“I think the CPI has peaked, yes. But that does not mean it will necessarily be going down,” said Mark Schniepp, director of the California Economic Forecast in Santa Barbara.

One big factor that influences today’s predictions: The price report that roiled markets and grabbed headlines last week reflected patterns from a month ago, not the smaller increases in many areas that consumers experience now.

“It captured everything that’s already happened,” said Sanjay Varshney, professor of finance at California State University, Sacramento, said of the most recent price report..

Another important development likely to ease price increases involves the Federal Reserve. It’s determined to quash inflation, and is expected to raise interest rates again next week. Higher interest rates are supposed to slow demand, which in turn should motivate sellers to keep prices stable in order to attract increasingly reluctant buyers.

Here are the some of the key price trends experts see:


Energy prices were up 41.6% over the 12 months ending in June, the largest yearly increase since 1980. Gasoline prices were a big reason, increasing 59.9%.

But oil prices are falling. They flirted with $120 a barrel this spring, but Friday, were trading for less than $100 before rising back above that level Monday.

Varshney saw several trends that strongly suggest prices at the pump will continue to fall. Demand has been down recently, according to the federal Energy Information Administration, as drivers reacted to the higher prices.

Supplies are increasing, as producers respond to the higher prices. The OPEC+ oil producing nations announced last month they would increase production 50% in July and August.


The slowdown in housing price increases is both good and bad news for consumers.

The sobering development is that mortgage rates averaged 5.71% Friday for a 30-year fixed loan, up from about 3% six months ago. They are expected to continue climbing with the Federal Reserve is expected to announce its latest interest rate increase next week.

That 5.71% rate means if someone bought at home at roughly $900,000, about the median price for a house in California, they’d pay $5,220 a month in principal, interest, insurance and taxes with 20% down. That’s up from $4,070 with a 3% mortgage.

But at the same time, prices have leveled off. The California Association of Realtors found in its latest analysis that the month-over-month increase of 1.6% in the May median price was in line with the long run average of 1.1% recorded between April and May in the last 43 years.

“I think rising inflation will contribute to higher rates and reduced buyer demand in the months ahead,” said Jordan Levine, the Realtor group’s vice president and chief economist.

“Price growth is expected to cool markedly in the second half of the year and we even expect a modest price decline next year as supply and demand rebalance after being red hot for a few years,” he said.


While food prices overall continued to climb last month at a faster pace than other items, meat has been down.

Beef and veal prices have dropped in each of the last three months. The average price of all meats, which includes pork, ham and lunch meat, were down 1.4% last month. Factors such as supply, demand and weather are among the reasons.

“What happens to price depends on how much supply and demand shifts,” said Lee Schulz, an extension livestock specialist at Iowa State University..


Air fares shot up over the past year, another example of demand outstripping supply. Ticket prices rose an average of 34.1% over the year.

But fares were down 1.2% last month. Car rentals dropped 2.2%. But it’s not a cause for celebration yet.

Becky Hypolite, travel advisor and owner of Crystal and Clear Travel in Sacramento, said prices have not stabilized.

“It doesn’t matter what you’re doing, whether it be cruises, air, hotel — it all is very extremely high,” Hypolite said. “Airline tickets averaging twice the cost.”

She added that, currently, due to supply and demand, airfare prices are better when going to Europe compared to the Caribbean, Mexico or Hawaii.

But she said she doesn’t see prices settling down anytime soon. She recommends people who are planning a vacation to not look into prices more than 320 days before departure. Whenever you plan too far in advance, there are no discounts, she said.