December 1, 2022

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US inflation reaches 8 percent again: economists expect the peak to be behind us

U.S. inflation rose to 8.3 percent (year-on-year) in April. This is slightly less than the previous month. At the time, life in the United States was 8.5 percent higher.

US inflation has reached 8 percent again. Inflation has eased slightly compared to March, but is still above expectations. Economists put forward an 8.1 percent monetary devaluation. On a monthly basis, inflation rose to 0.3 percent. It rose another 1.2 percent in March.

Inflation is increasingly moving to other commodities. Major inflation, excluding food and energy prices, for example, was 6.5 percent in April. This figure is also higher than economists expect. They expected core inflation to be 6 percent. On a monthly basis, headline inflation rose sharply in April (+0.6 per cent) compared to March (+0.3 per cent).

Reactive markets

Higher inflation than expected has worried investors. Until inflation rises, the Federal Reserve will continue to take drastic measures to cope with rising prices. Last week, the US Federal Reserve 50 basis points interest rate hike Announced. Fed President Jerome Powell later told a news conference that he would raise interest rates at the same pace in the coming months. In addition, the regulator will reduce its balance sheet from July, which will increase long-term interest rates.

In recent times, financial markets In a hustle After the release of the inflation report, US markets seemed to continue the small recovery movement on Tuesday, but after more than three hours of trading, the price tables are turning red again. The S&P 500 And Dow Jones minus 0.5 and 0.2 percent, respectively Nasdaq Worst losses again with a 1.7 percent price decline.

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The Call 20 The trading day ended at 1.5 per cent in green. Before the inflation figures were released, it was still 1.1 percent.

What does the future bring?

Economists, however, continue to insist that inflation will fall further in the coming months as an immediate effect. War in Ukraine In order to reduce. Moreover, the fact that US inflation is set against the highest levels recorded last year (in principle) will lead to weaker price rises.

“We believe March 2022 will mark the peak of inflation,” said James Knightley, an economist at ING. He says annual inflation is unlikely to ease significantly unless geopolitical tensions, supply chain tensions and labor shortages ease significantly.

And the Financial Times Rather caution: In fact, price pressures are not a phenomenon that can be seen exclusively in sectors most affected by an epidemic, but rather have broad-based trends affecting all sectors, including symptoms of major inflation. Inflation is becoming a constant problem. In other words, the future is very uncertain.

(LP)