The Consumer Price Index rose only .3% last month showing inflation at the consumer level is still well contained. The only area showing inflation was the cost of gasoline at a 7.4% increase. The core rate of inflation is only 1.4% for the past year unchanged from the prior month.
The Federal Reserve has, in the past, had a target of 2% for inflation, and in recent months has stated that they would let it run higher than that because of the extra-long period of below-average inflation. Pundits and economists are starting to worry that the excessive spending out of Washington, and a return to a more normal economy as a result of the covid vaccine, will cause a significant spike in inflation this year.
If that is so, it has a long way to go to get above the FED’s 2% target. The odds are we may reach 3% or higher by year-end.