Prices of everything from oil and natural gas to wheat and corn have already started falling from their peaks earlier this year. That trend is likely to continue in 2022, lowering gas prices and stabilizing food costs for consumers, a potential boon for President Joe Biden’s party as it seeks to maintain control of Congress.
For now, consumer prices are still a hot issue, with the government on Friday expected to report another month of decades-high inflation — and the problem won’t disappear next year. Shipping delays that have driven up prices of products like cars and furniture, paired with slow-moving but longer-lasting cost increases such as rent, could spur the Federal Reserve to hike interest rates and curb economic activity. But the prices felt most acutely by voters could be telling a better story for Democrats heading into the midterms…
The biggest factor that could prove Republicans right about overall inflation would be a renewed surge in energy prices next spring and summer that goes above the levels of recent months.
But oil prices have likely peaked, barring unforeseen shocks, said Al Salazar, vice president of intelligence at energy analytics firm Enverus. The Organization of the Petroleum Exporting Countries is ramping up production, which will put downward pressure on prices, and major economies are turning to other energy sources to meet their heating costs for the winter, which could also be warmer than previously expected.