US Inflation Projected to Hit 2.0% by 2030
US inflation is forecast to average 2.0% between 2028 and 2030, down from recent highs. This decline is expected to trigger Federal Reserve rate cuts after the September 16 hike.
US inflation is projected to average 2.0% between 2028 and 2030. This marks a significant drop from the 2.6% level recorded in 2024. The Personal Consumption Expenditures Price Index peaked at 6.5% in 2022. Recent increases in 2026 were driven by external shocks. The Federal Reserve raised interest rates on September 16. The bank is expected to resume cuts as prices normalize. This trajectory aligns with the central bank's 2% target.
GN markets/inflation (en-US) identifies four key drivers for this deflationary trend. The first is the fading impact of tariffs. The second is the reversal of energy price spikes. The third involves wage growth consistent with low inflation. The fourth factor supports a broader return to price stability. These elements combine to create a clear path for disinflation. The outlook remains focused on structural adjustments rather than temporary shocks.
Tariff effects will fade
Tariff hikes in 2025 added 0.3 percentage points to inflation. Core goods inflation reached 0.9% in 2025. It is tracking at 1.6% in 2026. The historical average for core goods inflation is near 0%. The Supreme Court struck down part of the tariffs in February 2026. No new major tariff hikes are currently anticipated. Once the 2025 impact fully plays out, prices should revert to norms. Durables and nondurables inflation are expected to decline significantly.
Energy prices will recede
West Texas Intermediate oil prices hit $102 per barrel in September. This represents a 70% increase year to date. The surge stems from the failed US-Iran ceasefire. Fighting resumed in August after the Strait of Hormuz remained closed. Futures markets expect prices to drop to $72 per barrel by October 2027. This potential decline would provide a deflationary impulse. The current disruption is viewed as temporary. Infrastructure repair and resumed flows will likely restore prewar price levels.
Wage growth aligns with targets
Wage growth is no longer a primary driver of inflation. The composite measure stood at 3.5% year over year in Q2 2026. This is down from the 6.2% peak in Q1 2022. Subtracting average productivity growth of 1.9% from wage growth implies an inflation rate of 1.6%. This calculation assumes a constant labor share of GDP. Weak wage growth supports the broader goal of price stability. The labor market is no longer exerting upward pressure on costs.
