Solid Economic Growth and Rising Inflation

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Economy Off to a Strong Start and Rising Inflation Concerns

By Blu Putnam, Chief Economist
Erik Norland, Senior Economist
CME Group

Economy on Path to Solid Growth in 2021

  • ​U.S. economy grew 1.6% in Q1 2021, 6.4% annualized.
  • Economy could expand close to 10% in 2021.
  • An uneven sectoral recovery could pose headwinds in 2022.
  • Aging population could temper growth in 2020s.
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Will Rising Inflation Fade Away?

  • ​​​​​​Fed believes rise in inflation is due to base effects, will pass with time.
  • Inflation expectations have risen to their highest level since 2013.
  • Fed says pandemic still poses risks, no need to tighten policy now.
  • Investors believe Fed could begin to ease asset purchases this year.
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