Get Ready for the Great U.S. Inflation Mirage of 2021

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The story of U.S. inflation in 2021 could very well amount to this: It’s all a mirage.

Americans are likely to see prices jump across a variety of sectors next year, thanks in part to Covid-19 vaccines that will potentially turbocharge demand for such pandemic casualties as travel and tickets to sporting events.

With prices also climbing for some inputs such as copper and lumber, inflation could very well reach or surpass the Federal Reserve’s 2% target in some months. Financial markets are increasingly pricing in higher inflation in coming years, and debates over whether the central bank should start easing back its record monetary stimulus may intensify.




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