The Federal Reserve will start to worry if core PCE, which reflects growth of personal consumption in the United States, excluding energy and food, reaches 2.8%, according to the Reuters poll.

At the same time, respondents believe that the central bank will enact measures to curb inflation only if this economic indicator holds at this level at least for three months.

The PCE Core Index, a key inflation indicator for the Fed, stood at 1.8% y/y in March.

Data released on Wednesday showed that US consumer prices (CPI) rose at their most in nearly 12 years in April, driven by pickup in consumer demand as the economy reopened.

The overwhelming majority of those surveyed (36 out of 41) believe that the Fed will wait at least three months during which PCE Core will hold at 2.8% before making changes in the level of stimulus. Eight respondents believe that the central bank response should be expected only in 12 months.

The consensus forecast is that the PCE Core indicator will jump to 2.4% in the current quarter and then decline and will range from 2.0% to 2.2% starting in the third quarter and until the end of 2022.

Economists, on average, predict that the US economy will grow 6.5% this year and 4.1% next year. The previous forecast provided for a rise of 6.2% and 4.0%, respectively.

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