Demand for goods is slowing because higher interest rates are restraining household spending. And the supply of goods is improving as global bottlenecks ease and lower energy prices reduce shipping and production costs. As a result, inflation is coming down quickly. We expect it will hit 3% this summer, even as the economy continues to grow modestly.
We are encouraged by this progress, but we expect that getting inflation from 3% back to the 2% target is going to be more difficult. Our current projection has that happening only by the end of 2024.