Even as Americans struggle with the rising cost of living, economists warn that inflation pressures could continue building in the months ahead.
The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, reached 3.4% in August, well above the central bank’s 2% target.
Americans are already feeling the pressure: In September, consumer confidence fell to its lowest level since 2014, with more people describing their finances as “bad” rather than “good.”
They also believe the worst is yet to come. A recent survey by the New York Fed found that consumers expect inflation to reach 3.9% over the next year, the highest expectation since May 2023.
One major force that could push inflation higher is rising fuel prices. Diesel has surged 68% since the start of the Iran war, raising transportation costs. According to Moody’s analyst Mark Zandi, higher diesel prices could translate to broader inflation, while Goldman Sachs specifically warns that the rising cost of transportation could lead to higher prices on groceries and other goods.
Tariffs are another major factor boosting inflation. New research from the New York Fed shows that the full economic impact of recent tariffs has yet to be felt and that consumer prices—including those for American-made products—may continue rising throughout the next 12 months.
The threat of persistent inflation has already prompted the Federal Reserve to raise interest rates for the first time in three years, with further increases possible. But higher rates also make borrowing more expensive, adding to the financial pressure on American households.
As concerns grow about the rising cost of living and the falling purchasing power of the dollar, gold could attract greater attention. Historically, gold has served as a hedge against inflation, offering a way to help preserve purchasing power when paper currency declines.
