U.S. inflation rises at the fastest pace in almost 13 years as the Federal Reserve looks to raise rates
Inflation concerns have spread around the world after soaring living costs in the United States last month.
According to the US Bureau of Labor Statistics, consumer prices across the pond were 5% higher in May than they were a year ago. This is the fastest inflation rate in almost 13 years.
There are deep concerns now that the US economy is “enthusiastic” and that the Federal Reserve Board’s interest rate setting committee will intervene next week.
Warning: US Treasury Secretary and former Fed Chair Janet Yellen (pictured) said interest rates may need to be raised to stop the overheating of the U.S. economy.
Numbers from the world’s largest economy came a few days after data from China also showed rising inflation.
Today, the Fed’s Open Market Committee needs to cut money printing programs and raise interest rates.
“This is the most dangerous moment for monetary policy since the introduction of the inflation target in the UK in 1992,” warned Andy Hulldan, chief economist at the Bank of England, this week.
And the outlook for rising interest rates will be a hot topic among world leaders at the G7 Summit starting today.
Robert Alster, Chief Investment Officer of Close Brothers Asset Management, said:
The Federal Reserve Board has already stated that it is ready to push inflation above its target of 2% as it seeks to drive a strong recovery from the pandemic.
However, rising prices raise concerns that global inflation could rise and boost living costs in other countries. Danni Hewson, financial analyst at AJ Bell, said: The Federal Reserve Board consistently says it’s ready to heat things up, but how hot is it? “
Some economists remain optimistic. Daniele Antonucci, Chief Economist at Quintet Private Bank, said:
Rising energy prices are also pushing up inflation. And as manufacturing activity became more active, the cost of raw materials soared. In the UK, inflation reached 1.5% in April, more than doubling from 0.7% in March.
Halden is concerned that inflation could skyrocket unless the Bank of England cuts its money printing program and raises interest rates.
Janet Yellen, US Treasury Secretary and former Chairman of the Federal Reserve Board, said at an event hosted by The Atlantic earlier this month: .. “
She repeatedly says that higher inflation will be temporary.
U.S. inflation heats up as the Federal Reserve looks to raise interest rates
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