Still, the spread between rates on nominal ten-year Treasury notes and inflation-indexed ten-year maturities has risen about half a percentage point since mid-March – not an insignificant change. Interestingly, despite some apparent deterioration in actual and expected CPI inflation, there has been little acceleration in the broader index of core personal consumption expenditure prices.
In that regard, the lack of pricing power reported overwhelmingly by business people underscores an absence of inflationary zest. Undoubtedly businesses are feeling the effects of diminished pressures in product markets. With energy inflation probably peaking and the easing of tightness in labor markets expected to damp wage increases, prices seem likely to be contained.