'Inflation Is Peaking,' Says Bank of America CEO

That's actually pretty good news for consumers.

January's much awaited Consumer Price Index (CPI) reading contained a surprising bit of news. While annual inflation came down from December and registered at 6.4%, on a monthly basis, the cost of consumer goods rose 0.5% from December to January. Following that news, stock values proceeded to plummet as investors faced the reality of persistent inflation.

Of course, an uptick in consumer prices isn't exactly excellent news. But if you ask Bank of America CEO Brian Moynihan, it's not the worst news, either.

Inflation won't be a problem forever

Inflation levels have been elevated since the latter part of 2021. And at this point, consumers are clearly getting tired of it.

Given that many people have racked up costly credit card debt over the past year and change to cope with inflation, that's understandable. But it's also important to recognize that inflation won't be an issue forever. In fact, in a recent Barron's article, Moynihan was quoted as saying that "inflation is peaking."

"We have to step back and realize these month-to-month data sets are going to bounce around a little bit…" said Moynihan. "But the broad trend is inflation has peaked in some areas and not quite peaked in others, and that's good and that's also the intended outcome "

Coping with lingering inflation

Bringing inflation levels downward isn't akin to simply flipping a switch. And as Moynihan said, we may, in the coming months, see the cost of certain expenses drop while other expenses rise.

The best thing to do, therefore, is be patient. And also, consumers should have faith that the Federal Reserve is committed to cooling inflation -- for better or worse.

The fact that the central bank is trying to bring inflation back down to the 2% range is a good thing, as it could spell worlds of relief for cash-strapped consumers. But in raising interest rates to encourage the pullback in consumer spending needed to slow inflation, the Fed is also making borrowing more expensive across the board, whether in the form of an auto loan, credit card balance, or personal loan.

Still, consumers should recognize that the current cycle of inflation won't last forever, and that living costs are likely to go down as a whole from here. Those struggling to keep up with their bills may need to pick up second jobs for a period of time until inflation cools, and that's not necessarily an easy route to take. But the fact that the economy is loaded with jobs should at least make this ongoing period of inflation easier to cope with.

And speaking of job opportunities, struggling consumers may have the option to grow their wages at their main jobs by pursuing roles outside of their current employers. At a time when recession warnings are still being sounded, leaving a job and starting a new one may not be the most comfortable thing. But often, moving on to a new place of work is the most effective way to score a sizable boost in pay.