Anyone who doubts the Federal Reserve will push back against accelerating inflation need only consider the size of the U.S. Treasury market to put their mind at ease.

The U.S. consumer price index jumped 5% in May from a year earlier, while core CPI climbed 3.8% in the biggest increase since 1992. Both measures exceeded estimates on a month-over-month basis as well, suggesting that the price pressures in the world’s largest economy aren’t just due to so-called base effects. Though it’s still too soon to say whether Fed officials are right or wrong that this move higher is largely transitory, the figures hammer home why the central bank will likely move forward apace with talking about how to best scale back asset purchases at its meeting next week.

Leap of Faith

Fed expects the highest core inflation rate since 1992 will be fleeting

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