How long until prices go back down?

Have you ever seen any prices go down, short of official currency devaluation? If you are willing to pay X amount for something today, you will be willing to pay this amount as a minimum, forever... why would anyone sell it any cheaper than the amount you are willing to pay

Largely, prices aren't going to go down. Best case, prices rise slower than wages for a while. Of course this kind of recovery is very uneven and tends to favor people with relatively higher wages to begin with.

Fuel is linked to international politics and food prices can change with the weather. Those are harder to predict but at least they have a chance of actually going down.

War is inflationary

"Commodities" usually refers to raw materials used in industry - rather than what you see in your home. Even when it's sugar. All of them go back down violently - I think because the actors in these fields don't go half way. Not like consumer products where the buyers still have to eat and buy cleaning products and clothes.

For example copper or steel prices change often harshly as industrial producers and industrial consumers adjust. A large mining company's decisions can significantly curtail world production (by mostly turning off mines that are temporarily not profitable enough) - sending prices higher eventually or quickly. Large industrial consumers can sharply curtail their orders when they conclude they have too large a stockpile or when they shut down lots of projects at once - like developers and steel for construction in China - just like they ramped up their projects like crazy a few years before. That tends to send prices way down because world consumption is significantly affected. This happened to manufacturers of oil drilling pipes when oil companies all slowed down exploration at once a few years ago - prices plunged until the stockpiles were exhausted and specialist producers were in deep trouble. Several large industrial producers can develop new mines (or semiconductor factories) all at once ... and soon later prices will crash. They all tried to exploit the previous high prices and soon enough something had to give.

Consumer prices don't bounce around nearly as much.

Some manufacturers sit half way. For example one that makes cereal fungus detection kits and that year the climate doesn't favor fungus. Well, the manufacturer is likely to cut production but not change prices because a lower price would not increase sales and the next year will likely be "normal".

"How long" is interesting. Very often it's impossible to tell. I still haven't read a good account of why lumber prices went up so fast and down so fast in the US during covid.

For semiconductor prices, the cycle can be very long because building and ramping up a new factory (fab) takes years. And several manufacturers probably went at it at the same time - just about guaranteeing a fast down cycle later.

For oil the upward slope can be very fast because news of war, or oil companies can announce slowing exploration from one day to the next. While a downward effect like developing fracking was spread over years. "Peace" in the Middle East would have a very fast downward effect by reassuring everyone that oil commerce is back to normal.

In the long run.

Stop using illegal currency and it won't affect you.

For something broader like "consumer price index" kinds of things, the answer is that it only rarely goes down. Governments are deathly afraid of "deflation", even short term deflation. The rationale is that if consumers and producers think prices are going down (perhaps because the economy is slowing down), they are incentivized to delay purchases - causing the economy to slow down more and all the way to a crash and unemployement which causes the population to be very unhappy. Second, governments love to make themselves look good to their constituents by handing out money or buying stuff we can't afford (plenty of it useless), and (not) paying for it through currency inflation (that is, creating money). Few people believe that deflation would be useful. Any threat of deflation is grounds for governments to step in and try to return to a slight inflation target.

For the "producer price index" - prices manufacturers pay - these indexes do come down often and sharply and temporarily - amid a clear uptrend. I guess these markets are more agile and buyers at businesses are actively paid to look for and engineer less expensive solutions.

In a world of fiat currency, the value of said paper money tends towards its natural value over time (zero). The way to deal with higher prices is higher wages, which is why being on a fixed income is such a harsh fate for those retired and not getting proper "cost of living" increases.

Proces will go down when wages fall, interest is negative, rents are negative, and there's a sledge of bankruptcy. Those are your returns on factors of production. In the short term, choose 3 to 4.

Or when there's a massive technological shift but people don't change what they buy, which would be mass unemployment.

These are the conditions for a falling general price level. Do you really want that?

Inflation as a rate means change on the last period. Usually reported as an annual change. For the inflation rate to fall doesn't mean prices do. 0% means zero change. For price reversion you'd need negative inflation, deflation, of a large amount.

In basic economics, you have a supply curve and a demand curve, and where they meet is the price. If there's more demand than supply, the price goes up (think about an egg shortage from avian flu). If there's more supply than demand, the price goes down (think about halloween candy on November 1st).

To ask "how long" you have to ask when will the demand decrease or the supply increase.

A few short points, all of which are personal opinions.

> Inflation is a commonly misinterpreted phenomena. What is happening shouldn't be thought of as "prices are going up" but should be seen through a lens of "the value of the currency goes down". This is why a nickel used to buy a candy bar, but a nickel can't buy you anything today. The currency (and your savings) is "inflated to worthlessness" (stolen, some might say) by politicians looking to buy votes.

> Overall prices are unlikely to go down (that would require deflation, which mainstream Keynesians greatly dislike and work against), but the rate of price increase might go back to more normal/palatable levels sometime in the next couple of years as that is the current goal of fiscal policy to work to reduce inflation and why interest rates are high. As to how we get there, I have my doubts about really reducing inflation in an environment of money printing without experiencing a true economic depression. The most realistic best case scenario if current policy is followed might be a multi-year period of no big economic crash, but this current malaise persisting for an uncomfortably long time. Some people argue that a harsh, but swift correction, might be the best overall thing for the economy in the long run, but of course no political party would ever be willing to think along these lines.

> Certain prices like oil/gas and food (because fertilizer and fuel are big parts of the cost of food) may go down in the future, but that would be more about supply/demand changing than the currency and inflation. Personally, I think increasing world tensions, as well as a lot of environmentalist hostility to oil/gas exploration/transportation/refinement has a lot to do with the spike in a lot of prices. And so long as unrealistic environmentalists and people with certain foreign policy beliefs that are not conducive to peace are running the show, there's nothing about this supply issue that might dramatically change in the short term, particularly with the Strategic Petroleum Reserve already tapped.

Speaking from the UK here. The CPI has largely remained around 6% recently here in the Uk, interest rates are very high but the Bank of England hasn’t started quantitative easing to start reducing interest rates and thus hopefully bringing down inflation. I believe that it will start in early 2024 at some point here in the Uk but the macro economics of the wars around the world will have a major impact of timeline to which that happens.

But I don’t suspect until later 2024 or 2025 for it to truly come down but I believe it won’t come down to much lower levels to like 2019 levels. A coke bottle will be around £2-2.50 it won’t be lower than that. Even if it is it will be pennies.

They won't. The Fed is targeting ~2% annual inflation rate, they never said anything about deflation.