WASHINGTON (dpa-AFX) – In the USA, the momentum of the price increase continued to increase in June. The inflation rate rose to 9.1 percent and reached the highest level in more than 40 years, the Labor Department announced in Washington on Wednesday. Inflation is at its highest since December 1981. Experts believe that inflation dynamics in the world’s largest economy have not yet peaked and expect interest rates to continue to rise.
the financial markets were surprised by the strength of the price surge. Although analysts had expected the inflation rate to rise, they had only assumed an average of 8.8 percent. In May, inflation was 8.6 percent.
In a monthly comparison, too, prices in the USA rose more than expected. In that regard, the ministry reported a 1.3 percent gain for June, while the market had expected a 1.1 percent gain.
The biggest price driver remains the cost of energy. Fuels in particular increased here. In June, gasoline was 11.2 percent more expensive than in May, the statement said. On the other hand, the increase in food prices was slightly weaker than the general price increase at 1.0 percent in a monthly comparison.
Analyst Bernd Krampen from NordLB also pointed out that rising real estate prices and higher incomes are driving rents further up. In his opinion, “there is no way to speak of a turnaround on the inflation front.”
The US dollar and US capital market rates rose following the release of price data. On the other hand, the exchange rate of the euro briefly fell below the US dollar mark on the foreign exchange market. It is the first time since late 2002 that the euro has fallen below parity with the US currency.
The reaction on the financial markets suggests that investors are expecting further and significant interest rate hikes by the US Federal Reserve. Most recently, it had raised interest rates by 0.75 percentage points. Another large interest rate step is expected at the next interest rate meeting at the end of the month.
“With half measures, the US economy can apparently not cool down enough to get inflation under control,” said analyst Bernd Weidensteiner from Commerzbank with a view to the rest monetary policy in the USA. He assumes that the Fed will raise the key interest rate to 4.0 percent by the end of the year./jkr/bgf/he