WASHINGTON — .
Some analysts have expressed concern that the collapse of three large banks last spring could cause nervous lenders to sharply tighten their loan qualifications and worsen the drop in lending. Economists at Goldman Sachs have estimated, though, that such damage will be modest. Yet much of that drop reflected sharply lower gas prices and slowdown in food inflation. Excluding volatile food and energy costs, uncomfortably high inflation persisted: So-called core prices rose 5.3% year over year, down from 5.5% in April but far above the Fed’s 2% annual target.
Tuesday’s inflation data showed that most of the rise in core prices reflected high rents and used car prices. Those costs are expected to ease later this year. “We think next month’s increase is probably the last of the cycle,” said Alan Detmeister, an economist at UBS.
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