2.3 Evidence of broad-based inflation continues to be scant as a small number of items—not the whole price basket—are driving inflation prints Broad-based measure (median inflation) not spiking …caused by afew reopening-related consumption higher, despite surges in headline inflation… categories 0 2. n o i s r e 1 V Two-thirds of inflation driven by COVID-sensitive sectors 202 r Raw inflation figure Captures only the center of CPI e b o 1 t (all items) basket used to calculate inflation that account for ~17% of the CPI basket c 25 O Y/Y change ed t 100% 100% a d p 6% Headline u es v i CPI t ec 5% p 34% Other s er Median P e v 4% i t CPI u Car rental ec x 3% 3% E Auto insurance G 5% C 83% B 5% . 2% Hotels ed v 6% er Airfare es r 1% s t h 16% Energy g i r l 0% l A . 4% New cars p u o r -1% G g n i t 2% l u -2% <1% 27% Used cars s n 7% o C 4% n o t -3% 3% s o B 2000 2005 2010 2015 2020 2 2 y CPI basket weights Contribution to inflation (%) b 1 2 0 2 © t h g i r y p 1. The median CPI excludes all price changes except for the one in the center of the distribution of price changes, where theprice changes are ranked from lowest to highest (or most negative to most positive); 2. Average o March, April, May 2020; 16 C Source: Bloomberg, BLS, Federal Reserve Bank of Cleveland, BCG.