July 6, 2022

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US inflation highs to 8.5% since 1981

Inflation in the United States rose further in March as fuel prices rose, mainly as a result of the war in Ukraine. Inflation last year stood at 8.5 percent year-on-year, according to the U.S. government. This is the highest level since December 1981.

In February, consumer prices rose 7.9 percent in the world’s largest economy. Inflation in the United States has now hovered above 6 percent for six consecutive months. Pump prices for Americans rose to record highs in March. But food prices have also risen due to the Ukraine war.

The US Federal Reserve has been raising interest rates in response to higher inflation. The US Federal Reserve is expected to raise interest rates early next month Increase the point by 0.5 percent

Higher interest rates make it more expensive for consumers and businesses to borrow, which reduces price increases.

In principle, rising interest rates are not good news for the stock market because high borrowing costs for companies can affect the profit margins of listed companies. On Wall Street, however, the reaction to the March inflation data was somewhat positive. Inflation in March was in line with expectations, which made investors happy.

Shortly after the start, the Dow Jones Industrial Average rose 0.3 percent to 34,415 points. The broader S&P 500 was up 0.6 percent at 4,434 points.

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