Why higher inflation may no longer be considered "transitory"

The Federal Reserve has stuck to its characterization of this year's higher inflation as a "transitory" issue. But after six months of higher prices touching everything from food to energy prices, some economists say the phenomenon appears to be sticking around — and could last well into 2022. 

"I think probably another word is needed," noted Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. Although, she added wryly, "transitory" could simply mean "it won't persist in perpetuity."

Such price hikes are sending shocks through household budgets, following almost a decade when inflation rose between 1% to 2% annually. But in 2021, inflation is forecast to stand close to 5%, according to the Federal Reserve Bank of Minneapolis. That's souring Americans on the nation's financial outlook, with more than 6 in 10 calling the economy poor, according to polling from The Associated Press-NORC Center for Public Affairs Research.