—Two months of sharply rising prices have raised concerns that record-high government financial aid and the Federal Reserve’ s ultra-low interest rate policies— when the economy is already surging— have elevated the risk of accelerating inflation. In May, consumer prices rose 5% from a year earlier, the largest such year-over-year jump since 2008..
In the early days of 2021, the outlook for inflation was peppered with words such as “mild” and “moderate.” Inflation, the year-over-year increase in consumer prices, was expected to rise but just slightly above its historic benchmark of 2%.
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