Consumer prices for April showed a 4.2% year-on-year increase today, outpacing analysts’ expectations. What does rising inflation mean for the path of the economy in 2021? On the latest episode of the ABA Banking Journal Podcast — sponsored by Risk Proof, a PwC product — ABA Economic Research Specialist Hugo Dante goes beyond the headlines with inflation figures.

Among other issues, Dante discusses:

• The extent to which inflation figures are due to “base effects” driven by the economic shock during the spring of 2020.
• The unusual transitory nature of consumer demand in the wake of pandemic-related closures and supply chain disruptions.
• How post-pandemic employment trends are affecting the inflation outlook.
• The Fed’s pre-COVID-19 willingness to let inflation run moderately over its 2% target to reflect periods when it ran under the target.

This episode is sponsored by Risk Proof, a PwC product.

• Read Dante’s Banking Journal article “Should We Be Worried about Inflation?“