The core CPI, excluding food and energy, rose in May year-on-year by 3.8%, compared to 3% in the same month of 2020.
Federal Reserve Vice Chair of Supervision Randall Quarles said recently that the latest jump in US inflation would be temporary even though the Fed’s preferred measure of price increases rose to 3.1% in April, a number well above the level that His target is 2%.
“A high monthly inflation reading does not necessarily lead to permanently high inflation,” Quarles said.
After similar spikes in the aftermath of the 2007-2009 recession, he added, “We spent ten years below the level targeted by the Federal Reserve…we’ve seen this before and supply chains have loosened at different speeds. Parts of the economy are starting to move at a mixed pace… We will see inflationary pressures and one would expect it to be temporary.”