According to the US Bureau of Statistics, the consumer price index increased by 7.5% in January compared to the same month in 2021. This was the fastest annual rate since 1982. On a monthly basis, the consumer price index rose by 0.6%, which exceeded economists' expectations (0.5%). Recently, inflation in the US has already hit its 40-year high – in December, the indicator was fixed at 7% y/y. Analysts had forecast inflation at 7.3%. It is noted that the shortage of materials and high energy prices contribute to the price increase. The persistence of high inflation has already prompted the Federal Reserve to accelerate its monetary tightening schedule, and the first interest rate hike since the start of the pandemic is expected to be implemented in March. The central bank may even make an unusually large increase by half a point (the probability of this is now estimated in the futures markets at 50%). High inflation not only challenged the Fed, but also proved to be a political problem for President Joe Biden and members of the Democratic Party preparing for the midterm elections. Despite the fact that a significant increase in the number of jobs contributed to the economic recovery in the United States, inflation and supply chain disruptions subjected the Biden administration to a barrage of attacks from Republican lawmakers.
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