Headline CPI inflation hit 6.2% last month with core CPI inflation climbing to 4.6%. Energy prices look set to drop back a little over the next couple of months, but core inflation will breach 5%, as cyclical price pressures continue to mount and the renewed surge in auction prices for used vehicles is reflected in the CPI measure. Infrastructure week has finally arrived, with President Biden due to sign the bill into law on Monday. The infrastructure bill is often touted as a $1.2bn package, but much of that is re-purposed funds. Only $550bn is “new” money and, after accounting for the revenue offsets, the CBO estimates that the bill will add only $250bn to the deficit over the next decade.
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