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Inflation is coming—and it could get political

May 11, 2021, 9:35 PM UTC

When Treasury Secretary Janet Yellen said last week that interest rates could rise, all investors heard was the I-word and stocks dropped. Yellen quickly walked back that statement: “I don’t think there’s going to be an inflationary problem, but if there is, the Fed can be counted on to address it.” 

The Federal Reserve does see prices rising at a faster pace in 2021, but Chair Jerome Powell calls it “transitory” inflation. As the economy hits full gear, prices for everything from commodities to services will spike. Lumber alone is already up 280% since the onset of the pandemic. But once the burst from pent-up demand passes, 2021 price hikes should correct. At least that’s the Fed’s narrative. 

So how are Americans reacting to the potential for price hikes? To find out, Fortune teamed up with SurveyMonkey to poll 2,113 adults in the U.S. between April 30 and May 3.* The poll’s modeled error estimate is plus or minus 3 percentage points.

The Fortune-SurveyMonkey poll finds 87% of U.S. adults are concerned about inflation, including 58% who say they are “very concerned.” That can already cause a change in consumer behavior: When people are afraid of prices rising, they spend money faster in order to lock in a price. This could result in bidding wars on things such as homes or cars.

Americans’ view of the economy often depends on whether their party occupies the White House. Just look at this past Fortune Analytics chart and see how Republicans and Democrats flipped views after Biden took office. So it isn’t surprising that the share of Republicans (75%) who are “very concerned” about inflation is much higher than Democrats (42%). And Independents (61%) are right in the middle. Given how high those concern levels are now—with inflation still pretty low on paper—it poses the question: If inflation takes off, will it become a political issue? 

Already, prices are soaring in the housing market, with the median sales price up 16% year over year. That’s the result of demographics—millennials hitting their peak home-buying years—and historically low mortgage rates combining to create an influx of buyers who bid up a limited number of homes. The number of homes for sales is down over 50% year over year, according to realtor.com.

There’s also an incredible amount of pent-up demand in the service side of the economy, for everything from nightlife to amusement parks to Airbnb rentals. That’s also setting the stage for steep price hikes. We’re already seeing a huge rise in booked flights—and upped flight prices.

But the biggest price hikes are in commodities: corn, steel, and copper, for instance. But none more so than lumber: On Friday, the price per thousand board feet of lumber soared to an all-time high of $1,414, according to Random Lengths. Since the onset of the pandemic, the price of lumber has skyrocketed 295%. This is the result of an unprecedented mismatch in lumber supply and demand—something set off by pandemic-spurred trends in TK.

The Fed very well could be right: The rapid rise in housing, commodities, and services costs is “transitory.” But that alone won’t prevent it from becoming a political issue. Just look back at the temporary oil shocks in the 1970s and 2000s—and the subsequent political backlash.

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