Faster U.S. inflation erases years of undershot targets: Kemp
Rapidly rising consumer prices as the U.S. economy re-opens after the pandemic have erased years of below-target inflation, intensifying questions about when the central bank will start reducing monetary stimulus.
U.S. consumer prices rose at a compound annual rate of 3.00% per year over the two years to June 2021, the fastest two-year increase since October 2008, according to data from the Bureau of Labor Statistics.
Core consumer prices excluding volatile food and energy items increased at a compound annual rate of 2.82% per year, the fastest increase for almost a quarter of a century.
Comparisons with 2019 help avoid distortions caused by the first wave of the epidemic and widespread business closures in 2020, and underscore that faster inflation is not just due to baseline effects.
In August 2020, the Federal Reserve committed itself to achieving an average inflation…