Price Pressure

The price index for personal-consumption expenditures rose 1.6% year-over-year, and the core index, which excludes energy and food, and is the Fed’s favorite measure of inflation, rose just 1.4% over the same period. This means prices in 2/21 were only trivially higher than in 2/20, prior to the onset of Covid-19, despite $3.1 trillion in stimulus monies! Y-o-Y inflation will soon appear but primarily because prices collapsed last spring.

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