Hot inflation may have become scorching in May and is expected to hit a 28-year high
- Economists expect core consumer inflation, excluding food and energy, jumped 3.5%, the highest level since 1993.
- The consumer price index is reported at 8:30 a.m. ET Thursday, and is expected to show headline inflation rose a sizzling 4.7%, the fastest pace since 2008.
- Investors are watching the data to see if it looks like inflation could be hotter and more persistent than the Fed expects it to be.
Greater expectations
Mark Zandi, chief economist at Moody’s Analytics, said he expects a 0.6% jump in May core CPI. “The year-over-year growth rate would be 3.65%,” he said. “The last time it was this high was July 1992.”
The last time the core CPI was above the consensus expectation of 3.5% was February 1993.
Swonk expects headline inflation to reach 4.9% year-over-year. That compares to a 4.2% headline pace in April. Core inflation was 3% year-over-year in April, a level it has only occasionally reached in the past two decades.
Going beyond the expected price increases
Wells Fargo bond strategists say they will be looking at the data for trends that go beyond the obvious price hikes associated with the economic reopening.
Reference: CNBC
Read More: https://www.cnbc.com/2021/06/09/hot-inflation-became-scorching-in-may-and-is-expected-to-hit-a-28-year-high.html
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