US Consumer Price Index (CPI)
May 8.6% → June 9.1%
Giant prospects for the Fed
As the US Consumer Price Index (CPI) rose again in June after May, fears of inflation and recession are rising. Supermarket and shopping cart in Brooklyn, New York, USA.
The US consumer price index (CPI) rose 9.1% in June compared to June last year.
It outperformed the May increase (8.6%), the biggest since December 1981, and exceeded the market forecast (8.8%).
Core consumer price index, excluding highly volatile energy and food products, rose 5.9% from June last year and 0.7% from May, according to a statement from the US Department of Labor on the 13th (local time). this year, respectively.
In May, the consumer price index (CPI) rose by 8.6% compared to the same period last year. This growth rate exceeded that of March (8.5%) and was the highest in 41 years since December 1981.
As a result, the US Federal Reserve (Fed) is expected to maintain a tight austerity policy to keep inflation in check. On the 15th of last month (local time), the Fed took a “giant step” to raise its key interest rate by 0.75 percentage points for the first time in 28 years. The results of the June CPI confirm the prospect that the Fed will continue to take giant steps in the future.
Federal Reserve Chairman Jerome Powell told the Senate Banking Committee on the 22nd (local time) that he had made the decision, saying “austerity helps contain growth and balance supply and demand.” the need for a further increase in interest rates.
Chairman Powell was also the first to recognize the possibility of a recession caused by tough austerity measures. “A recession is not what the Fed intends, but it is definitely possible,” he said. He dismissed market fears that austerity measures could lead to a recession, but today the Senate officially recognized the possibility of a recession for the first time.
In addition, the global economy is being held back by the war between Russia and Ukraine, China’s containment policies and slow economic growth, disruptions in the global supply chain, rising prices and fears of inflation, and the resurgence of the mutated COVID-19 virus. .
Edaily correspondent Kim Sung Hoon sk4he@edaily.co.kr
Source: Economist
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