There is a big debate about whether the threat of inflation – sustained and rapid general increases in prices across a wide group of goods and services – is serious enough to deserve the attention of policymakers.
1970s and early 80s type inflation is not a forgone conclusion, but the data makes clear it is also a threat that cannot be dismissed. The Bureau of Economic Analysis released data showing that inflation roared to 5.4% in May; the highest inflation since July of 2008, when it was 5.5%. If sustained over time, inflation at the current level threatens to significantly curtail what should be a booming economy the rest of this year and beyond.
