Inflation rears its head amid spending debate

Source: The Hill | April 13, 2021 | Niv Elis

Economists are closely watching inflation data as prices begin to rise at their fastest pace in almost a decade.

The Consumer Price Index for March, released Tuesday, jumped a higher-than-expected 0.6 percent from February, the biggest monthly increase since 2012. Prices were up 2.6 percent compared with March of 2020.

Economists broadly agree that some degree of inflation is to be expected in the next few months as the economy recovers from the worst recession since the Great Depression.

“We don’t see runaway inflation as an imminent risk,” said S&P Global U.S. chief economist Beth Ann Bovino.

“Actual inflation is nowhere near what markets are pricing in, and even with a near-term price lift, it won’t be enough to signal runaway inflation.”

But Republicans are warning that President Biden’s big-ticket spending — the $1.9 trillion American Rescue Plan followed by a $2.3 trillion infrastructure proposal — will further spur further inflation, putting a strain on consumers.

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