Is inflation close to peaking?

Thru the Cycle President John Lonski revealed on Wednesday whether soaring inflation has hit a peak and argued that there is a "pretty good chance" of a recession by 2024. 

The economist told "Varney & Co." on Wednesday that he believes inflation is close to a "temporary peak," which was likely set in March on a year-over-year basis, and explained how it "could speed up again."  

"It may slow down, but unfortunately, it could speed up again if the U.S. economy regains momentum, but I don’t think that’s going to happen," Lonski told host Stuart Varney. 

"I think growth is going to slow down, spending is going to slow down and that is what is necessary to contain price inflation."

Lonski provided the insight as markets have been trading mixed on Wednesday with the tech-heavy NASDAQ Composite down nearly 30% year to date on fresh worries about a slowing economy.

Stocks have had some rough weeks in anticipation of and following the half-point interest rate hike by the Federal Reserve. It was the second of several anticipated increases this year as the central bank seeks to combat soaring inflation, which is at a high not seen in four decades.

The expectation now is that the Fed will take aggressive action to try and curb inflation, which remains near 40-year highs, according to the data for April released earlier this month, which has reduced investor appetite to hold assets perceived as higher risk.

Lonski spoke with Varney a few hours before the Federal Reserve is due to give insight into its decision-making by releasing minutes of its latest policy meeting.

EVERYBODY GETTING 'HURT' BY INFLATION: INVESTMENT EXPERT

He also noted on Wednesday that he believes spending on consumer services has been keeping the economy "alive," but warned that "there’s no guarantee that that’s going to continue indefinitely."

Earlier this month it was revealed that inflation cooled on an annual basis for the first time in months in April, but rose more than expected as supply chain constraints, the Russian war in Ukraine and strong consumer demand continued to keep consumer prices elevated. 

The Labor Department said earlier this month that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 8.3% in April from a year ago, below the 8.5% year-over-year surge recorded in March. Prices jumped 0.3% in the one-month period from March.

Those figures were both higher than the 8.1% headline figure and 0.2% monthly gain forecast by Refinitiv economists.

Lonski stressed on Wednesday that he doesn’t believe the U.S. will experience a recession immediately, but pointed to "shocking" new data, specifically new home sales, noting that data like that indicates "signs of unexpected weakness in the U.S. economy." 

On Tuesday it was revealed sales of new single-family houses in the U.S. dropped significantly more than expected last month to the lowest level in two years as rising construction costs, home prices, interest rates and supply chain woes continue to batter the industry.

The U.S. Census Bureau's latest data shows the pace of new home sales fell by 16.6% in April from the month before at a seasonally adjusted rate of 591,000. Analysts surveyed by Refinitiv anticipated a dip of 1.7%.

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The drop is 26.9% lower than a year ago, and the lowest since April 2020. This is the fourth straight month new home sales have declined.

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FOX Business’ Breck Dumas contributed to this report.