Bottlenecks in the supply chain, which led to a record jump in prices of used cars and trucks last month, were expected to ease.
“We have the capacity to produce this stuff, we simply need time to get things back on line.”The consumer price index jumped 0.8% last month, the largest gain since June 2009.
It has signaled it could tolerate higher inflation for some time to offset years in which inflation was lodged below its 2% target, a flexible average.
Excluding the volatile food and energy components, the CPI soared 0.9% last month, the largest gain since April 1982.
“Put together with potentially higher wage inflation, higher inflation may be stickier than the Fed expects,” said David Kelly, chief global strategist at JPMorgan Asset Management in New York.
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