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.

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.