If the Fed keeps raising interest (e.g. 0.5%) and vows to reduce interest rate to at least 2.00%, how long could that possibly take? Thanks.
According to Fed own forecasts inflation should reach 2% shortly after 2025. Note this is forecast and a best estimate, it’s impossible to actually know how long that could take if there are new macroeconomic perturbations or policy changes etc.
Based on your question on money stack exchange, your main interest seems to be I bonds. Insofar, the series of interest is this series; look at the section
Finally, the next grouping of data shows actually CPI figures from 1913 to present.
All Urban Consumers – (CPI-U) 1913-2022*
The latest data:
According to this series, the U.S. actually experienced deflation from October to November because the value went down from 298.012 to 297.711, hence -0.1%. This is also what the official source computes.
Annualized, this would be -1.2%. Unrealistic, but bear in mind that this is for all items, including food and energy and non-seasonally adjusted. The forecasts from the FED, as well as the inflation breakeven rates provided in other answers are better suited to get an idea of expectations. You can read some details about inflation expectations and breakeven rates here.
As of Jan 7th 2023 the bond market thinks we are almost there already. Inflation breakevens for the next 2yrs are in the 2-2.5% range. Furthermore, the 7% number you are quoting is rather misleading because it is backward looking - that is the amount of inflation that occurred over the last 12 months. The most recent monthly reading was 0.2% for November which translates to a 2.4% annual rate. To summarize, we think we are currently running at about 2.5%. It is a good question as to whether we can get down below this to 2% but the main point is there’s a lot of evidence we are nearly there.