Headline Inflation Could Keep Accelerating, Wilding Says

• Central banks need to be careful due to elevated post-pandemic inflation and the risk of inflation expectations becoming entrenched.
• The labor market is in a weaker position, with falling labor income growth and declining consumer savings rates.
• Headline inflation could accelerate by a percentage point, leading to a deceleration in real incomes and posing a risk to economic growth.

Pimco Economist Tiffany Wilding expresses concern about persistent inflation and its impact on the economy. She highlights that central banks must be cautious, as inflation expectations could lead to wage negotiations, and the labor market is in a weaker position. She forecasts headline inflation to accelerate by a percentage point, causing real incomes to decelerate, posing a risk to growth.