- Inflation has been gradually rising since 2Q20, but there will be a step change in March and April with the economy in a very different position to what it was 12 months before.
- Headline US inflation has risen from 0.2% year-on-year last May to 1.7% today, but it is barely halfway to the 3.5-4% area where we see it peaking.
- While officials remain broadly relaxed, we believe inflation could remain elevated through next year, potentially triggering the Fed into earlier action on interest rates than they are currently signalling.
For further details see:
U.S. Inflation: A Long Way To The Top