Over the last 40 years, the United States has managed to significantly reduce its annual inflation rate.

Over the last 40 years, the United States has managed to significantly reduce its annual inflation rate. The inflation rate has declined from triple digits to a single-digit figure, reaching three decimal places in 2022.

Among the Group of Seven (G7) or G7 wealthy nations, the United States has been the leader in reducing the cost of living. Other wealthy countries such as Germany, the United Kingdom, France, Italy, Canada, and Japan still lag behind.

Wendy Edelberg, the director of the Hamilton Project and a senior fellow at the Brookings Institution, believes that the success of the United States in lowering inflation has been fueled by controlled inflation expectations.

The impact of the Ukraine conflict had somewhat differentiated effects on Europe compared to the United States. Due to the direct dependence on Russian supplies, the European countries felt a more severe impact.

It is assumed that the world's largest economy, the United States, has managed to handle inflationary pressures quite effectively.

However, economists argue that the task was much more complicated than it might seem. In an interview with BBC Mundo, Edelberg stated, "Controlling the underlying causes of inflation, apart from fuel and food prices, was quite complex, and a few days ago, we were very disappointed and worried."

"Now it appears to be plausible," she said, referring to the ability to control the underlying causes of inflation. Economic Recovery

In the United States, the demand for goods had been steadily increasing, and along with it, the prices of those goods were also rising rapidly. It felt like "a big day sale every week," according to experts.

Recently, that demand has somewhat decreased, indicating that the train of demand is taking a downward turn.

The U.S. central bank, the Federal Reserve, plays a significant role in the country's economic policy. The institution has gradually increased interest rates to control inflation.

Economist David Wilcox, a senior fellow at the Peterson Institute for International Economics and the Bloombergs, stated, "The Fed has aggressively raised interest rates to an extent that is unnatural for inflation control."

As a result, the borrowing for homes, cars, or investments in new projects has become more expensive. This increase in interest rates has acted as a brake to slow down the relentless surge in inflation.

The recent ease in the demand has coincided with the relief of supply chain disruptions caused by the COVID pandemic, leading to a more stable supply of readily available goods. 

With adequate supply, the pressure for price hikes has diminished, and commercial disruption caused by health crises has also been alleviated, leading to a decline in commercial turbulence.

However, just when things were seemingly improving, in February 2022, the conflict in Ukraine began, throwing fuel on the fire of inflation.

The dependence on Russian energy has made it more challenging for the US, and even though the inflationary pressures skyrocketed a few months after the start of the conflict, the government's measures to control spending and the Federal Reserve's braking of inflation kept it in check. 

The situation has not yet completely calmed down.

"I don't think we have returned to a state of full inflation and economics," said economist Wilcox. Can you see any potential issues in the US?

Economists had predicted that if interest rates were aggressively raised to control inflation, it would negatively impact the economy, leading to increased unemployment.

Generally, high-interest rates affect economic growth and increase unemployment.

Surprisingly, this has not happened in the current situation in the US. 

The labor market also appears to be in good shape despite the decreased demand.

While it may be a sudden change for other countries, it seems like the US is slowly turning towards itself instead of being immediately affected by global economic woes.

"I think if that's the case, we may see a mild downturn," said the economist.

As a result, the country might experience a slight economic slowdown or a moderate level of unemployment.