When will inflation come down?

For many Americans enduring higher prices, easing inflation was on the wishlist for 2023. But based on the most recent data, inflation is still holding strong — though there are signs a cool-off could be coming. Consumer prices as of April were 4.9% higher than they were a year ago, the Labor Department reported in May, which was only a bit improved from a 5% inflation rate in March. However, the last time consumer price index (CPI) inflation was under 5% was in June 2021. The latest CPI reading is "yet another positive datapoint for Americans hoping price deceleration has begun to pick up steam," Forbes said.

Still, the current inflation rate remains a far cry from the Federal Reserve's target of 2%, especially given it's coupled with a strong job market. Many believe that in spite of this, the Fed will stay the course on its plan to pause rate hikes for now, although not everyone agrees.

Where are inflation rates expected to go in 2023?

It depends on who you ask — and what the future holds.

Inflation may drop to around 3.5% "in the next few months," Kiplinger said. New York Federal Reserve Bank president John Williams predicts inflation will hit that rate "by the end of this year," NPR reported. Federal Reserve Bank of St. Louis economist and assistant vice president Fernando M. Martin more broadly forecasted in May that "inflation for 2023 may end up being well above the 2% target, though perhaps not as elevated as in 2021 and 2022."

The Fed remains caught between a rock and a hard place, as it attempts to lower inflation without sparking a recession. After a series of rate hikes in the past year and half pushed interest rates between 5% and 5.25% as of the Fed's May meeting, Federal Reserve Chair Jerome Powell indicated that an upcoming pause might be possible. However, Powell avoided making any promises, saying the Fed was "going to need data to accumulate on that" to make a definite decision.

What the Fed ends up doing in June will play a big role in the future trajectory of inflation. Another rate hike would crack down harder on stubbornly high inflation, but some fear it could lead to a recession.

Are high prices on their way out?

No, probably not. "Economists and financial experts agree on one thing: Higher prices will likely last well into next year, if not longer," TIME's NextAdvisor said. "Consumers can expect that this year will be the worst for inflation, with prices estimated to go down by 2023," CNBC reported.

However, we might start to see light at the end of the tunnel as supply chains adapt and supply and demand reach a better balance, alongside any further action from the Federal Reserve.

What's the Fed likely to do next?

In May, the Fed forged ahead with its pledge to curb inflation by raising rates in what marked its 10th rate hike in a little over a year. At the press conference just after that meeting, Powell indicated that the Fed might take a breather on rate hikes coming up, though he said a final decision would depend on the data. 

So far, the data has been a mixed bag, which has led experts to hedge in their predictions of what the Fed will do next. "They would like to go on hold and pause, but ... if need be, raising rates further is an option. It comes down to the fact that inflation's remaining so stubbornly high," Kathy Bostjancic, chief economist at Nationwide, told The Associated Press.

Should we be worried about a recession?

The odds are all over the place when it comes to whether or not we should brace ourselves for a recession — at least in 2023.

Perhaps the biggest case against an impending recession right now is the continued strength of the U.S. labor market. "For this year, given these jobs numbers, it's hard to see a recession," Mark Zandi, chief economist at Moody's Analytics, told CNN in June. "Increasingly, the odds of a recession this year are fading. A lot of economists who have called for a recession are now in the uncomfortable position of pushing back the start date."

In evidence of that backing away, Goldman Sachs in June lowered its estimate of the odds of a recession over next year to 25% following the bipartisan debt ceiling deal and the easing of banking industry fears, Investing.com reported.

Not everyone is ready to wave away recession fears just yet. A recent analysis from Haver Analytics put the probability of a recession at 99.3%. And before you dismiss that figure as alarmist, MarketWatch noted that "the last two times we saw those over-99% odds were in the 70s and 80s, and recessions did in fact occur."

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Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She has previously served as the managing editor for investing and savings content at LendingTree, an editor at SmartAsset and a staff writer for The Week. This article is in part based on information first published on The Week's sister site, Kiplinger.com