No surprises with April’s inflation report: CEI analysis

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Inflation rose 0.3 percent in April compared to 0.4 percent in March. While this wasn’t a surprise for economists, the news indicates a tough inflation battle is still underway. CEI senior economist Ryan Young provides his analysis on the report.

“April’s inflation news isn’t that great but at least there were no surprises. The Fed’s decision last month to slow down its balance sheet drawback was an ominous sign, but any inflationary effects from that will not show up in CPI numbers until at least this fall.

“If the Fed can restrain its instinct to stimulate the economy during election season, then inflation will likely stay about where it is now and might even go back to its 2 percent target if markets think that Fed officials mean what they say about staying the course on inflation. That remains an uphill climb.

“Good news on GDP growth and unemployment will make the Fed’s job easier, but it must hold firm on inflation no matter what happens. Stimulus now means a slowdown later plus more inflation for good measure.”