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How far will inflation overshoot?

We learned this week that core PCE inflation reached 1.9% in March, within a whisker of the Fed’s 2% target, and we think it has further to rise over the rest of this year. We expect a gradual pick-up in labour cost growth, the past depreciation of the dollar, and the faster growth of hospital costs to push core PCE inflation close to 2.5% by year-end.

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