Inflation in the United States eased slightly in April, raising hopes that inflation would peak. According to the US government, inflation last month stood at 8.3 percent year-on-year. In March, consumer prices rose 8.5 percent in the world’s largest economy. This is the highest level since December 1981.
Economists had previously expected inflation to fall to 8.1 percent. Nevertheless, Americans are still struggling with significant price increases, and many households are seeing a decline in purchasing power due to higher fuel prices. Food prices have risen due to the Ukraine war.
High inflation undermines President Joe Biden’s popularity. He therefore branded the fight against inflation as his primary domestic priority. Americans use their oil reserves to raise petrol prices at the pump.
To combat high inflation, the Federal Reserve began raising interest rates by a quarter of a percentage point in March. In April, the central bank picked up momentum by raising interest rates by half a percentage point. This is the largest rate increase since 2000. Federal Reserve Chairman Jerome Powell said half-point interest rates would be back on the table at the next interest rate meeting.
Powell said last month that inflation in the United States was “very high” and that the central bank’s primary goal was to keep prices stable. “Without price stability, the economy will not work for anyone.” The central bank chairman is facing the challenge of not causing a recession by putting a very hard brake on interest rate hikes. However, according to Powell, the economic downturn could be averted.
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