Inflation in the United States continues to rise more than expected. In October, prices in the United States were 6.2 percent higher than the previous year. Reported American Statistics Institute BLS Wednesday afternoon. This is the highest inflation rate in the United States in 31 years and significantly higher than the September inflation rate (5.4 percent). Economists expect an average of 5.8 percent in October.

The high figure for October puts pressure on the US Federal Reserve to raise interest rates earlier than expected, which will reduce inflation. Currently, half of central bank executives expect a rate hike from next year. The central bank announced last week that it would begin phasing out monthly purchases of government debt already lowering long-term interest rates. After that, the central bank may raise interest rates (now above 0 percent).

Wide foundation

Inflation in October was “broad-based,” according to BLS statistics. Energy, housing, food, used and new cars and medical care were all expensive. The nature and duration of current inflation is being debated in the United States and Europe. Much of the current inflation wave is related to the corona crisis. Disruptions in supply chains have created shortages of all kinds of goods and pushed up prices. Due to the strong economic recovery the energy has become scarce and expensive. It is unclear when these effects will end.

Especially in the United States, the government has boosted the economic recovery with massive support measures. The cash flow of the state increases the demand for goods and services, leading to additional shortages and higher prices. President Biden’s $ 1,900 billion US recovery plan contributes to US inflation, Thus it was decided Researchers from the San Francisco District of the Central Bank last month. In Europe, government incentives are generally lower – inflation in Europe (4.1 percent in October against the euro) is one of the reasons why it lags slightly behind the United States.

Globally

The current rise in prices shows that the current inflation trend continues. Speakers at the conference of Swiss bank UBS stressed the global scale of the inflation wave on Wednesday, including De Nederlandsche Bank chairman Glas Knott. Inflation easily penetrates from one country to another through world trade. Deficiency at the beginning of supply chains eventually leads to higher prices.

Speaking at the UBS conference, Fed executive James Bullard said he expects inflation to fall to “50 percent” next year. He therefore constantly takes inflation into account and argues for flexibility in the central bank to raise interest rates quickly if necessary. Knot zei The European Central Bank must also be prepared to control inflation.

read more: The knot in the main debate takes a stand; Constantly warns of the risk of inflation