Derby’s Take: Surging Prices for Used Cars May Cast Long Shadow on Inflation

As the U.S. economy springs back to life, one of the biggest challenges that Federal Reserve officials will face on the monetary policy front is price inflation, which they expect will post a temporary jump.

One factor likely to drive price pressures that could affect whether the expected rise in inflation is short-lived comes down to prices for used cars. In a research note on Monday, Pantheon Macroeconomics Chief Economist Ian Shepherdson warned that used-car prices will play a notable role in inflation dynamics, and that…

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