Source: Lucia Mutikani, REUTERS, 5/12/21

U.S. consumer prices increased by the most in nearly 12 years in April as booming demand amid a reopening economy pushed against supply constraints, which could add fuel to financial market fears of a lengthy period of higher inflation. The report from the Labor Department on Wednesday also showed a strong building up of underlying price pressures, extending a selloff on Wall Street. Most economists were, however, unwavering in their belief that the surge in prices would be temporary, with bottlenecks in the supply chain expected to ease. Federal Reserve Chair Jerome Powell shares similar views.

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