WASHINGTON (AP) — Two months of sharply rising prices have raised concerns that record-high government financial aid and the Federal Reserve’s ultra-low interest rate policies — when the economy is already surging — have elevated the risk of accelerating inflation.

In May, consumer prices rose 5% from a year earlier, the largest such year-over-year jump since 2008.

Many economists see the recent spike as temporary. Others say they worry that higher consumer prices will persist. Jason Furman, a Harvard professor who was President Barack Obama’s top economic adviser, thinks the reality is more complicated. He does, however, lean toward the higher-inflation-will-persist camp.

Furman notes that while most economists expect inflation to slow from its current quickened pace, not all think it will fall back to the Fed’s preferred level of 2% a year.

The Associated Press spoke recently with Furman about why higher inflation might prove only temporary, why it might persist and whether a little more inflation is all that bad.

The interview was edited for length and clarity.

Q. WHAT’S DRIVING INFLATION UP, AND DO YOU THINK IT WILL PERSIST?

A. There’s been a lot of very temporary inflation from a set of quirks related to the economy’s reopening. For example, used car prices have absolutely soared, and other prices are getting back to where they were pre-pandemic. I don’t think anyone thinks the recent rate of price increase is going to continue. The question is, how much does it slow down? Does it slow down all the way back to the 2% increase every year we used to see? Or does it slow down less than that, and we’re left with something more like a 3% increase every year?

Q. HOW BAD WOULD 3% INFLATION BE? IS IT SOMETHING WE REALLY NEED TO AVOID?

A. I don’t actually think 3% inflation would be terrible, but it depends. If policymakers tried to lower inflation from 3% to 2%, (by raising interest rates), that could be pretty painful. If wages don’t keep up with prices, that would also be troubling. But if we want to operate the economy, year in and year out, at a higher inflation rate going forward, I don’t see that as a problem. But I do think it’s important to make policy based on the most realistic and accurate expectations for what’s happening in the future.

Q. BEYOND THE ECONOMY’S REOPENING, WHAT MIGHT DRIVE A MORE SUSTAINED BOUT OF INFLATION?

A. I think the four reasons why you might worry that inflation is going to be more persistent are, No. 1, there are some shoes that haven’t dropped yet. The biggest of them being the price of shelter — that’s rent. And then it’s something called owner’s equivalent rent, which is what it costs a homeowner to live in their home. (Both rents and home prices have risen sharply.)

Second factor is some prices are sticky. That means they don’t adjust really quickly and right away. A lot of prices change once a year, and you’re going to see more of those price changes over time. Wages also tend to be sticky. A lot of employers might in September decide on new wages for January.

The third factor is that it’s likely that demand continues to exceed supply through the rest of the year. People have a lot of money. They’re spending that money, but not everyone’s back to work, which means we can’t make everything that people want to buy.

And finally, and most speculatively, expectations for inflation play a big role in the dynamics of inflation. Could expectations change? Could they become unanchored if people start to expect more inflation? It would be self-fulfilling.

Q. HOW DOES THE CURRENT SITUATION COMPARE WITH THE SPIRALING INFLATION OF THE 1970s?

A. There’s no danger of a repeat of the experience like the 1970s. The Fed learned that lesson. They’ll never let inflation get to 10%. The 1960s is the model for what we’re going through now. Inflation crept up from about 1.5% to about 5%.

One of the troubling things in the 1960s was that wages didn’t keep up with prices, and so people saw their purchasing power, their real wages fall. I’m not saying that’s what’s going to happen now, but that is the scenario to be worried about.

Q. DO YOU THINK THE FED HAS PROPERLY ASSESSED THE RISKS?

A. They shifted policy in the right direction at their latest meeting (on June 15-16). But I think they’re going to surprise themselves that they’re going to end up with a very strong recovery in jobs, that we’re going to end up with more inflation than we expect. And so they’re going to raise rates sooner than they think they’re going to.

Q. WOULD THAT SLOW THE ECONOMY OR POTENTIALLY CAUSE A RECESSION?

A. There’s two scenarios for the Fed. The most likely one is that our unemployment rate is quite low in 2022. Inflation is running above trend. And so the choice is very easy. They’ve achieved roughly their maximum employment mandate. They raise rates. The bad scenario for the Fed would be the unemployment rate remains elevated and inflation is running at 3% and then their dual mandate will be pulling them in different directions. And I’m not sure how they would resolve that.

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In this case, at least, we have our answer. But if we’re being honest with ourselves, we know that true justice is much more than a single verdict in a single trial.

True justice requires that we come to terms with the fact that Black Americans are treated differently, every day. It requires us to recognize that millions of our friends, family, and fellow citizens live in far that their next encounter with law enforcement could be their last. And it requires us to do the sometimes thankless, often difficult, but always necessary work of making the America we know more like the America we believe in.

While today’s verdict may have been a necessary step on the road to progress, it was far from a sufficient one. We cannot rest. We will need to follow through with the concrete reforms that will reduce and ultimately eliminate racial bias in our criminal justice system. We will need to redouble efforts to expand economic opportunity for those communities that have been too long marginalized.

And as we continue the fight, we can draw strength from the millions of people – especially young people – who have marched and protested and spoken up over the last year, shining a light on inequity and calling for change. Justice is closer today not simply because of this verdict, but because of their work.

Michelle and I send our prayers to the Floyd family, in the hopes that they may find peace. And we stand shoulder-to-shoulder with all those who are committed to guaranteeing every American the full measure of justice that George and so many others have been denied.

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“We are thrilled with the first day sales,” said David Drake, publisher of the Penguin Random House imprint Crown. “They reflect the widespread excitement that readers have for President Obama’s highly anticipated and extraordinarily written book.” The only book by a former White House resident to come close to the early pace of “A Promised Land” is the memoir by Obama’s wife, Michelle Obama, whose “Becoming” sold 725,000 copies in North America its first day and has topped 10 million worldwide since its release in 2018.

“Becoming” is still so in demand that Crown, which publishes both Obamas and reportedly paid around $60 million for their books, has yet to release a paperback. As of midday Wednesday, “A Promised Land” was No. 1 on Amazon.com and Barnes & Noble.com. James Daunt, CEO of Barnes & Noble, said that the superstore chain easily sold more than 50,000 copies its first day and hoped to reach half a million within 10 days.

“So far it has been neck and neck with Michelle Obama’s book,” he said. By comparison, Bill Clinton’s “My Life” sold around 400,000 copies in North America its first day and George W. Bush’s “Decision Points” around 220,000, with sales for each memoir currently between 3.5 and 4 million copies. The fastest selling book in memory remains J.K. Rowling’s seventh and final Harry Potter novel, “Harry Potter and the Deathly Hallows,” which came out in 2007 and sold more than 8 million copies within 24 hours.

Obama’s 768-page memoir, which came out Tuesday and has a list price of $45, had unusually risky timing for a book of such importance to the author, to readers and to the publishing industry. It came out just two weeks after Election Day and could have been overshadowed had the race still been in doubt or perhaps unwanted by distressed Obama fans if President Donald Trump had defeated Democratic nominee Joe Biden. But Biden won and his victory likely renews interest in an era when he was Obama’s trusted and popular vice president.

Obama himself acknowledges that he didn’t intend for the book, the first of two planned volumes, to arrive so close to a presidential election or to take nearly four years after he left the White House — months longer than for “My Life” and two years longer than “Decision Points.” In the introduction to “A Promised Land,” dated August 2020, Obama writes that “the book kept growing in length and scope” as he found he needed more words than expected to capture a given moment — a bind many authors well understand.

He was also working under conditions he “didn’t fully anticipate,” from the pandemic to the Black Lives Matters protests, to, “most troubling of all,” how the country’s “democracy seems to be teetering on the brink of crisis.” Because of the pandemic, Obama will not go on the all-star arena tour Michelle Obama had for “Becoming.” But he benefits from the attention of any memoir by a former president and by the special attention for Obama, who has the rare stature among politicians of writing his own books and for attracting as much or more attention for how he tells a story than for the story itself. Obama has already written two acclaimed, million-selling works, “Dreams from My Father” and “The Audacity of Hope, which came out in 2006.

His new book covers some of the same time period as his previous ones, while continuing his story through the first 2 1/2 years of his presidency and the 2011 killing of Osama bin Laden by the Navy SEALS. Publishers Weekly praised the book as “shot through with memorable turns of phrase,” while other reviews were more qualified, calling the book all too reflective of Obama’s thoughtful, even-handed style. The New York Times’ Jennifer Szalai wrote that the “most audacious thing” about “A Promised Land” is “the beaming portrait” of Obama on the cover.

The Washington Post’s Carlos Lozada noted that in “domestic policy and foreign affairs, in debates over culture and race, Obama splits differences, clings to the middle ground and trusts in process as much as principle.” “It turns out he is not a ‘revolutionary soul’ but a reformist one, ‘conservative in temperament if not in vision.’ Behind those dreams, the audacity and all that promise is a stubborn streak of moderation,” Lozada wrote.

Obama’s book is the highlight of publishing’s holiday season and for some independent bookstores, the potential difference between remaining in business or closing. Publishing sales have been surprisingly stable during the pandemic, but much of the benefit has gone to Amazon.com as readers turned increasingly to online purchases. The American Booksellers Association, the independent sellers’ trade group, has warned that hundreds of stores could go out of business if holiday sales fall short.

Kris Kleindienst, co-owner of Left Bank Books in St. Louis, anticipates selling around 1,000 copies by the end of the year, a number which makes “a HUGE difference” for annual revenues, she wrote in an email. Sarah McNally, owner of McNally Jackson Books in Manhattan, said she sold around 600 copies in the first 24 hours, a pace exceeded only by the final Harry Potter book. “It’s not hard to be a bright spot this year, a year when we would have gone out of business without federal aid,” McNally said. “But Obama does feel like a savior, as do our customers for buying this from us.”

-HILLEL ITALIE AP National Writer

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