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- Core PCE (personal consumption expenditures), rose to 3.5% in the first quarter, marking its second-fastest pace of growth since 2011.
- Fed chair Jerome Powell says inflation is “transitory” and will pass once economic activity normalizes.
- We asked three experts if they stand with Powell or believe inflation might be a bigger issue.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
On April 29, new data showed that a key measure of inflation monitored by the Fed – core PCE (personal consumption expenditures) – rose to 3.5% from 1.7% in the first quarter, marking its second-fastest pace of growth since 2011.
Then, on May 12, the Bureau of Labor Statistics released new Consumer Price Index (CPI) data that revealed a 4.2% rise in the all price index before seasonal adjustment.
The data confirmed what many market commentators had been suggesting for some time: inflation is rising. The big question is now whether this inflationary period is “transitory” as the Federal Reserve claims, or if it is here to stay.
There are experts on both sides of the argument with strong cases.
Mohamed El-Erian, the chief economic advisor at Allianz and president of Queen’s College, Cambridge, said in an interview with CNBC at the beginning of May that he believes inflation isn’t transitory as the Fed has claimed. He pointed to rising commodity prices, comments from Warren Buffett on pricing, and rising CPI and core…
