As prices of petroleum products and food are increasing, the rate of growth in the CPI is likely to rise further in the immediate future. As I noted earlier, the pace of economic growth seems to be decelerating at present. Given this, the overall supply and demand conditions seem unlikely to tighten for the time being.
As you are well aware, in February of this year, the Congress passed the American Recovery and Reinvestment Act, or ARRA, a major fiscal package aimed at strengthening near-term economic activity. The package included personal tax cuts and increases in transfer payments intended to stimulate household spending, incentives for business investment, increases in federal purchases, and federal grants for state and local governments.