The pass through of higher commodity prices pushed consumer price inflation up to a two-and-a-half-year high of 3.2% in April, from 2.7%. Nevertheless, with commodity prices now dropping back, the Fed can relax a little knowing that consumer price inflation is probably close to peaking. We expect inflation to climb to slightly above 3.5% by mid-year, before starting to drop back in the second half of this year.
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