Inflation can occur when prices rise due to increases in production costs, e.g. for raw materials and wages. An increase in demand for products and services can lead to inflation as consumers are willing to pay more for the product. Improvements in the supply chain and falling real estate prices have yet to be fully reflected in the inflation figures. Average inflation from 2024 to 2028 is likely to be just below the Federal Reserve's inflation target of 2.0%